#business credit score
Credit Scores and Factors for Acquiring Financing
If you’ve ever applied for a charge account, a personal loan, insurance, or a job, there’s a file about you. This file contains information on where you work and live, how you pay your bills, and whether you’ve been sued, arrested or filed for bankruptcy.
Companies that gather and sell this information are called Consumer Reporting Agencies (CRAs). The most common type of CRA is the credit bureau. The information CRAs sell about you to creditors, employers, insurers and other businesses is called a consumer report.
The Fair Credit Reporting Act regulates the collection, dissemination and use of consumer credit information. If your business uses credit reports for the following reasons, there are rules and regulations you must follow to ensure privacy of credit information:
To extend credit to your customers
As a pre-employment check for potential employers
Explains how you, as an employer, can use consumer reports when you hire new employees and when you evaluate employees for promotion, reassignment, and retention as long as you comply with the Fair Credit Reporting Act.
Details how insurance providers using consumer credit reports to underwrite insurance policies and to screen high-risk applicants must comply with privacy regulations under the Fair Credit Reporting Act.
Covers how businesses should take appropriate measures to dispose of sensitive information derived from consumer reports. This new federal rule was established to help protect the privacy of consumer information and reduce the risk of fraud and identity theft.
Written by CREDIT