The Future Of Credit Report Utilization Heading Into 2015

The use of your credit report is at an all time high. Many of the time that people pull your credit you likely will not even know your credit report is being pulled. It used to be only lenders could pull your credit report, then slowly landlords got into pulling credit reports on potential tenants, then employers got into the act of pulling potential employes credit reports to determine what kind of person they would be hiring. But now the number of groups pulling your credit report has increased. Today credit reports are being pulled for non lending reasons. Poor credit can now block you from getting that job you want, or from you being able to rent the right apartment all based on your credit report.

Health care providers have begun to also pull your credit report. Health care facilities such as hospitals and doctors are now yanking patients credit reports to decide if you can pay for your medical treatments or not, due to many years of patients skipping out on medical debt. Medical debt amount to a significant amount of Americans overall debt in 2013. One study found that in 2010, 30 million Americans had medical bills in collection. Hospitals and health care providers are looking for ways to mitigate loss by denying treatment to those they deem cannot afford the treatment, or by offering patients less effective but cheaper treatments based on their credit reports. The federal health insurance marketplace also makes use of it to verify your identity when applying for an Obama care policy.

With credit reports being pulled for so many non lending reasons, it is costing Americans opportunities. A bad credit report can happen for reasons you may not be able to control, such as extreme health issues, loss of a job, or other setbacks in life. It used to be that a poor credit score just made it impossible to obtain a loan at an affordable rate, now it is preventing people from obtaining good jobs and safe housing, the very things we need to get out of debt in fact. Bad credit reports are now a barrier to digging yourself out of debt, as you cannot very well pay your debts off without a good paying job. The idea employers performing credit background check is that employees who are financially responsible will be very responsible at work, have a higher work ethic and that those who have poor credit may be more likely to steal, take excessive time off and other issues. The barriers created by the ways that credit reports are now being used also traps many Americans deeper into debt as it has forced many Americans to use extreme forms of credit such as payday loans just to make necessary bills on time and adding more debt to an already blemished credit report.

Politicians are beginning to take notice of of the excessive use of credit reports in non traditional ways. Lawmakers are looking into ways to limit the use of credit reports by non lenders. Senator Elizabeth Warren of Massachusetts introduced legislation to prohibit employers from requiring a credit report for example under a bill called the Equal Employment for All Act. Senators Richard Blumenthal (D-Conn.), Sherrod Brown (D-Ohio), Patrick Leahy (D-Vt.), Edward J. Markey (D-Mass.), Jeanne Shaheen (D-N.H.), and Sheldon Whitehouse (D-R.I.) are co-sponsors of the new bill. If the bill passes it will prohibit employers from requiring potential employees to disclose their credit history, with the exception of jobs like FBI agent or other top clearance government jobs. “A bad credit rating is far more often the result of unexpected medical costs, unemployment, economic downturns, or other bad breaks than it is a reflection on an individual’s character or abilities,” Senator Warren said. It is not just politicians that are supporting the bill, the Equal Employment for All Act has been endorsed by more than 40 organizations across the country.

The bill would cover non traditional reporting agencies as well, such as smaller credit reporting agencies, which are beginning to become popular with some companies. If the bill does take effect and bars employers from pulling your credit, the companies in question could obtain information from other sources such as such as CoreLogic or LexisNexis, and most people do not know these exist, and access is not given to private individuals. Under the Fair Credit Reporting Act however you would be protected and have the right to see what information they have on file about you and you would have the right to dispute any inaccuracies.

Steven Moore is the editor and chief at best credit cards network, a collaboration of credit card and financial websites and has been covering the credit and finance markets since 2006. You can connect with him online at his Google plus page for additional questions regarding the potential chances forthcoming with credit reporting, credit cards and consumer finances in 2015.