We live in a world where technology is so ingrained into our lives. We can look up any person’s professional file (LinkedIn) or personal (Facebook) in an instant. Search engines (Google) store our previous search strings in their database, and display related advertisements to you on future visits.
No one uses cash anymore; plastic debit and credit cards are the way to go. With this change in social trend, various credit scoring agencies (CRAs) have been established to monitor our usage and help creditors make informed decisions. But is this credit scoring only limited to credit cards? The answer is far from it.
Your Personal Financial Mentor notes that whenever we buy an airplane ticket, apply for a mobile connection, take a loan or an insurance policy, pay our rent or tax, file a lawsuit, the transaction links back to these credit scoring agencies. It is like Big Brother watching our every move.
This brings us to the issue of our privacy rights. Our credit scoring report is a gold mine of data on us: social security number, current and all previous addresses, telephone numbers including unlisted ones, employment history and legal details, among others. We would possibly not have kept such detailed records ourselves!
This data remains confidential within financial institutions like banks and creditors where the person has an account, government offices, insurance companies and landlords; basically, anyone we already have a business or official relationship with. Prospective employers can gain access only after our permission is solicited and granted, ensuring further privacy. In America, the Fair Credit Reporting Act (FCRA) has established strict rules on who gets to view which data in a person’s credit report.
There are exceptions to data being included in the credit scoring report: privacy is given to personal details like age, ethnicity and marital status, and medical information. We should ideally request for a copy of this report at least once annually, to see who has viewed our history. This will also curtail identity theft, which is on the rise. Since each CRA has a different rating system, and may be linked with different sources, it is in our interest to check reports from all of them, and point out incorrect data or discrepancies; we have that right as the consumer.
Marketing companies would like to tap into the valuable credit scoring system, to expand their business. Yes, this is how we get emails or telephone calls about pre-approved loans or credit cards, which are most often spam to us. We have the privilege of opting out of such permissions, and saving us the time and bother.