Credit Check

This is a rather generic term that refers to contacting a credit reporting agency for information relating to the credit status or financial reliability of an individual consumer.

Many entities run, or perform, credit checks on individuals. Credit card companies, banks and other lenders do so in order to make a determination as to whether or not the individual they are considering extending credit to or making a loan to is in fact what could be considered credit worthy.

In addition to these, there are other entities that make use of the services of credit reporting bureaus. Employers and potential landlords use these services to establish the financial reliability of an individual based on that person’s financial reputation. Many insurance companies routinely do credit checks, using the result as part of the formula by which they determine the insurance rates that will be charged to the consumer. Even some utility companies check the credit status of those seeking their services.