Shadow Credit Agencies: Job seekers beware!

Shadow Credit Agencies: Job Seekers Beware

There is a growing tendency for prospective employers to insist on access to applicant’s credit bureau records.  This is a permanent part of the employment landscape for better or worse.  Credit checks were always a precondition of employment in positions where the employee will have access to cash or positions of trust and security.  This requirement has expanded.

Credit Score Thought to Reflect Character

Many employers feel that credit scores are a kind of report card for the applicant’s character in general.

shadow credit agencies

LexisNexis (Photo credit: Wikipedia)

This has led more people than ever to order their free annual credit reports, correct the obvious errors and take steps to improve their scores.  Cleaning up the records at Equifax, Experian and TransUnion is an open, highly regulated process.  These scores are like a passport to respectability in the financial world and indicate to others that you have a certain competency in the game of life.  Once you have combed through these reports and learned how to stay on the good side of the often counter-intuitive world of the 3 major credit bureaus, you may think you should be able to apply for any job with supreme confidence.  Think again.

Shadow Credit Agencies Track Other Things

There are billions of financial records collected by poorly regulated shadow credit agencies with little respect for accuracy. Unless the claims become judgments, the big 3 credit bureaus don’t care or track criminal records, magazine subscriptions, gym memberships, cell phone and cable bills, auto warranties, rent to own appliance and furniture stores, payday lenders, bounced checks, prepaid cards, utility bills and insurance claims.  These records are all tracked by shadow credit agencies whose clients are the lenders, not the consumer.  There is never an obvious procedure for pulling your file to check it for accuracy…if you know a file on you exists at all. How can you ask for something you don’t know about?

Unregistered and Unregulated

There is no registry for these shadow credit agencies. Federal law requiring lenders to notify customers about reporting late or missed payments to large credit reporting agencies don’t specify that they have to say which ones.  Shadow credit agencies such as L2C sell this information to lenders, landlords, medical providers and prospective employers.  Lexis-Nexis, the largest provider of information services to employers, crows on its website about “easily accessible intelligence” and “reducing reputation risk associated with employee wrongdoing” without mentioning anything about controls for accuracy.  LexisNexis collects public records from the PACER system and from courthouses around the country.  The major credit bureau’s public records data comes from LexisNexis.  The carefully delineated Federal rules for the big 3 don’t apply to shadow credit agencies. Mistakes are rampant. These mistakes can cost an individual a job they may need and deserve.

 Shaky Unverified Data

Students, immigrants, and low income consumers are referred to in the credit world as “thin file”, “no file”, “under banked” or “un banked.”  Companies such as Chex Systems, TeleCheck or SCAN (bounced checks),  Alliant Data (installment payments like health clubs) and The National Communications, Telecom and Utilities Exchange use shaky unverified data to approve or reject new accounts.  They decide on the size of the security deposit for what they call “Sub-Prime” people but their methods and formulas are shrouded in self imposed secrecy.  A credit scoring firm called eBureau has a Web site that includes no information on how a consumer requests a file!  The businesses that submit data may be grossly negligent or even spiteful liars and the consumer suffers with no means of ever knowing what happened.  The shadow credit agencies may be including information from a person with the same or similar name, typos or information that is just plain wrong for any number of reasons.

Eight Categories of Alternative Credit Reporting Agencies

After considerable research I have concluded that alternative credit reporting agencies can be divided into 8 categories.  Within these 8 categories I have done my best to list as many alternative credit agencies as I can find up to this point.

  • Credit Reporting Agencies that Supplement the Big 3
  1. Core Score Credit Reporting
  2. ID Analytics
  3. Innovis
  4. L2C
  5. LexisNexis Screening Solutions
  6. Pay Rent Build Credit (PRBC)/Microbilt
  • Employment Reporting Agencies
  1. Accurate Background
  2. Contemporary Information Corp.
  3. Early Warning Services
  4. EmployeeScreen IQ
  5. First Advantage
  6. GIS
  7. Hire Right
  8. Info Cubic
  9. Intellicorp
  10. Pre-Employ.com
  11. Trak 1 Technology
  12. Verifications Inc.
  13. The Work Number
  • Rental Reporting Agencies
  1. Core Logic Safe Rent
  2. Lexis Nexis Screening Solutions Inc. Resident History Report
  3. Leasing Desk (Real Page)
  4. Tenant Data Services
  • Medical Reporting Services
  1. Medical Information Bureau
  2. Milliman Intelli Script
  • Utility Credit Reporting Agencies
  1. National Consumer Telecon and Utilities Exchange
  • Auto and Property Insurance Reporting Agencies
  1. Insurance Services Office (ISO) (A Plus Property Reports)
  2. Insurance Information Exchange
  3. L.N. (Clue Personal Property Report)
  4. L.N. (Clue Auto Report)
  • Banking and Check History
  1. ChexSystems
  2. Certegy Check Services
  3. Telecheck
  • Payday Lending Reporting Agencies
  1. Factory Trust
  2. Clarity Services
  3. CL Verify Microbilt
  4. CoreLogicTeletrack
  5. Data X

Job Seekers:  Read the exact wording of your “consent to investigate” very carefully and don’t be afraid to ask questions!  You will gain in respect.

let’s hope the consumer financial protection bureau has the situation involving shadow credit agencies in it’s cross hairs.

 

 

 

 

Enhanced by Zemanta
The following two tabs change content below.
After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

Latest posts by Edward St. Onge (see all)

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>