Table of Contents

• Dossiers that can determine your future
• Our experiences ordering free specialty reports
• Accessing consumer reports is your right
• Your banking history can come back to haunt you
• Free brochure
• Do you have a CLUE?
• About Consumer Action

Web Bonus

• Major bank limits use of ChexSystems as screening tool
• ‘Blacklisted’ on ChexSystems?: You might have some options
• Medical specialty reports: Decoding your data for insurers
• Alternative credit reports: Options for the ‘credit invisible’
• Insider’s Guide to Specialty Consumer Reports (PDF)
• Directory of Specialty Consumer Reporting Agencies (PDF)

Dossiers that can determine your future

By Ruth Susswein

A myriad of companies, organizations and government entities are collecting information about us, storing the details in databases and creating dossiers on us. Often, this information is gathered so that companies can learn as much as possible about its customers in order to reduce a company’s risk.

Most people know about credit reports, used by lenders to vet loan applicants. It may, however, surprise many people that businesses want to know our medical, tenant, criminal histories—and more. This information is compiled and packaged into “specialty consumer reports” accessed by various segments of industry, from marketers to insurers to wireless service providers.

‘Insider’s 
Guide’

With this issue, Consumer Action is releasing two new, free consumer resources focusing on specialty credit reports.

The Insider’s Guide to Specialty Consumer Reports is a PDF guide to obtaining, understanding and managing your information. The 27-page guide, broken down by category of information, provides:

• The name of each specialty bureau
• What kind of information is listed
• Source of the data
• What kind of companies buy the reports
• When to order a free copy of your report
• Options for limiting data collection

Our PDF Directory of Specialty Consumer Reporting Agencies provides an at-a-glance listing of reporting agencies, contact information and report ordering and dispute instructions.

What’s
 so
 ‘special’?


As most of us know, credit reports are maintained on millions of individual consumers by the Big Three credit bureaus (Equifax, Experian and TransUnion). Credit reports record your borrowing and payment history on loans, mortgages and credit cards and are used by companies to gauge the likelihood you’ll repay extensions of credit.

In similar fashion, businesses subscribe to specialty consumer report services to assess the risk of doing business with prospective customers, tenants and employees:

• Before agreeing to write a homeowners policy, property insurers buy claims reports to learn about the claims we’ve filed on our cars or homes.
• Employers buy background reports to screen drivers for motor vehicle insurance claims and driving records, and check applicants’ dependability, criminal background, education and prior salaries.
• Landlords order reports to check for evictions, criminal records, credit history and bounced checks.
• Niche providers serve specific industries. Retail Equation alerts large retailers to consumers’ product return patterns in order to help stores prevent fraud. Payday lenders order Clarity reports for bank account history and loan balances, and order FactorTrust reports to verify employment and income.
• Some of the most common types of specialty consumer reports include: medical and prescription history, insurance claims, tenant history, bounced check history, utilities payments and employment/background screening.

There also are alternative credit history reports that allow consumers with no—or limited—credit histories to record bill payments and build a “nontraditional” payment history to help them qualify for credit. (See our Web Bonus article, Alternative credit reports: Options for the ‘credit invisible.)

Information in specialty reports may be used to decide whether you will get certain jobs, the price you pay for insurance (life, disability, homeowners and auto), your eligibility for a checking account and your ability to rent a place to live.

The data in specialty consumer reports is drawn from a myriad of sources—from public agencies (courts, motor vehicles departments, taxing authorities) to details you provide to financial services companies, lenders, employers, landlords, wireless phone companies and insurers.

Unfortunately, the reports often contain errors. You have a right to view and correct errors in many of these reports. In most cases, you have a right to be notified when information in one of these reports is relied upon to make an adverse decision about you. (This, however, is not true for some companies that collect and share data because they don’t technically fall under Fair Credit Reporting Act (FCRA) rules.)

When 
to 
order 
a 
report

Before applying for an individual insurance policy, job or rental you might want to look at what’s being reported about you.

As the Consumer Action team that worked on our report found, ordering a copy of your specialty reports isn’t always easy.

Sometimes you have to provide an uncomfortable amount of personal information before you receive a report. And sometimes you go through the motions just to find out there isn’t anything about you on file. This could be because you haven’t applied for individual life or health insurance in the last seven years, no public records about you exist or the companies you’ve done business with don’t report to any specialty bureaus.

Ordering specialty reports can be a worthwhile but time-consuming process. Allow enough time for ordering and error correction.

There are certain situations when ordering one or more of these reports makes sense.

Before applying for an individual life, long-term care or disability insurance policy, you may want to see if you have a report at the Medical Information Bureau (MIB) because your insurance eligibility and rates could be affected. MIB collects information on serious medical conditions for insurers. (Obamacare—the Affordable Care Act—prohibits discrimination on the basis of pre-existing conditions for medical insurance.)

If you have plans to rent an apartment (particularly if you have a history of not paying your rent), order a tenant history report before applying for a new place.

If you’ve been a victim of identity theft, review credit reports from each of the Big Three credit bureaus and the most widely used specialty reports. Reviewing these reports might help you spot any incidence of fraud and enable you to correct inaccuracies that could negatively impact you.

Under the Fair Credit Reporting Act, you are entitled to a free report from each bureau once a year for informational purposes, and another free report if you were charged a higher rate or denied credit, insurance, a bank account, an apartment or a job.

You are also entitled to review an updated report (for free) after you have disputed inaccurate information and it has been corrected.

In some cases, you will have the right to limit others’ access to these specialty reports by placing a “security freeze” on your file.

See “Accessing consumer reports is your right” in this issue for more information about ordering free reports and freezing your file.

Our experiences ordering free specialty reports

By Alegra Howard

In order to accurately describe the process of ordering specialty consumer reports, Consumer Action staffers requested their own consumåer files from a variety of specialty reporting companies.

Collectively, we found that it was a time-consuming process and resented the requirements to disclose personal information that we normally wouldn’t freely share, especially in light of the very limited details available in the files when received.

We requested our personal consumer files from the following eleven companies: Clarity, CLUE (LexisNexis), CoreLogic SafeRent, Insurance Information Exchange (IIE), LexisNexis, Medical Information Bureau (MIB), MedPoint, Milliman IntelliScript, TeleCheck, Retail Equation and The Work Number. There are a few ways consumers can request a report: by phone, online or by mailing in a completed request form. Request forms can be found on each company’s website—find contact information in our Directory of Specialty Consumer Reporting Agencies.

In order to receive a report, consumers must verify their identity, which involves providing either a Social Security number (or part of the number), past addresses and copies of ID cards, including a driver’s license, passport or Social Security card.

Milliman IntelliScript, a provider of prescription drug history reports, allows consumers to email their request with past address information and the last four digits of an SSN. Within just a few hours, a password-protected consumer file was emailed back (though only to explain that they did not have a consumer record on file for us).

In the end, eight of the 11 companies did not have files on the staffers who requested them. However, CoreLogic SafeRent, LexisNexis and Retail Equation sent reports that included personal data about individual staff members.

Once a request was submitted to a specialty reporting bureau, either by mail, online or by phone, it usually took 10-12 days to receive a file or a notification explaining that a consumer report does not exist. In most cases, instructions were included to dispute information along with a summary of the Fair Credit Reporting Act (FCRA), the federal law that regulates consumer reporting agencies.

The Retail Equation, a company that provides retail return history reports, took a bit longer than average to send its report. Our staffer requested her Retail Equation file via email, received an email response explaining requests had to be made by phone, and was then told she would receive the report via email within two days. Two weeks and several phone calls later, she finally received a hard copy via snail mail.

The Retail Equation’s report documented one return made to a national sporting goods store several years earlier. However, our staffer acknowledges making numerous returns to a variety of retailers as the majority of her retail purchases are made online. She was surprised that more of her return activity was not documented in her file.

The other reports received by staffers varied in content. CoreLogic SafeRent reports showed inquiries from a rental leasing agency and a preschool where the family had applied for enrollment.

LexisNexis provided the most comprehensive reports to two staffers. The LexisNexis Accurint background report included an impressive list of past mailing and email addresses, a marriage license, purchase activity (which did not seem accurate), real estate transactions (including one that was inaccurate) and a record of one staffer’s commonly used pseudonym.

In the letter that accompanied the LexisNexis Accurint report, the company states it does not verify its data, nor is it possible for them to correct inaccurate information. The Consumer Action staffer called to ask a customer service rep “Why would you want to collect and compile inaccurate information?” The LexisNexis representative did not have an answer other than “That’s what we get from the sources.” The company allows consumers to add information to their Accurint file but not change the data collected.

By law, a consumer reporting agency must verify disputed information and correct errors, but as a data broker, LexisNexis does not believe that all of its reports are subject to the Fair Credit Reporting Act consumer protection law. (LexisNexis sells dozens of different specialty reports.) While LexisNexis supplies consumers with a free Accurint background report, it maintains that some of its reports do not technically fall under FCRA rules, meaning the company believes it does not have to supply free reports nor correct errors. (LexisNexis CLUE insurance reports do follow FCRA rules.)

Nevertheless, LexisNexis finalized a class action lawsuit in September that said it had violated FCRA requirements in its handling of Accurint report requests and consumer disputes.

The 31,000 consumers who sued the company for providing reports to debt collectors without following FCRA rules will share in a $13.5M settlement. LexisNexis will also provide free access to Accurint Collection reports and observe dispute rights under FCRA. For more details on the case, visit this webpage with answers to frequently asked questions about the lawsuit and settlement.

When seeking information from LexisNexis, we recommend requesting a free “full file disclosure” report, which should contain all information the company collects about you.

LexisNexis offers a helpful Frequently Asked Questions sheet with answers to questions like “Who has access to information about me?,” “What information is provided to the company?,” etc. It also included a helpful resource sheet that identified which government agencies (with contact information) oversee various types of businesses (banks, airline carriers, investment brokers, etc.).

Clarity, a payday/subprime lending report provider, also included useful language in its “How to Read Your File Disclosure” pamphlet. The pamphlet explained commonly used codes and acronyms. Though no information was available on our staffer, the headers in the report clearly showed the kind of information collected: outstanding loans (auto, credit card, payday, etc.), loan balances, summary of charge-offs (bad debts) and collection accounts, application denials, and codes that track past-due accounts by the number of days a payment is late.

On the other hand, CoreLogic’s SafeRent consumer report was repetitive and confusing. Consumers would benefit from a supplemental key to help explain the file. The same page headers were repeated on several otherwise blank pages, which we took to mean no records were found. Identifying information, including names and multiple previous addresses, were included. CoreLogic ran a staffer’s name through several court and sex offender databases through a service called Crimcheck America, and unsurprisingly returned nothing.

Consensus from staff members who ordered their own reports was that the disclosures did not justify the amount of effort it took to request the files. They anticipated much more content would be included in their personal records. Ironically, all were concerned that they provided far more private, identifying information to companies in order to get a free report than they would have typically shared with unfamiliar entities. If anything, the specialty reporting company gained information from these consumer requests that allowed them to add and/or verify personal information.

While there are instances that warrant requesting a specialty report, we caution against requesting reports simply out of curiosity because you have to give a lot to get a little. In the request process, staff confirmed current and previous addresses, Social Security numbers and other personal information the agencies may not previously have had on record but will certainly keep on file.

Order specific specialty reports when there is a suspicion or knowledge of identity theft, prior to applying for individual life, long-term care or disability insurance policies, when a specialty report has been the source of inaccurate or outdated information, or when you receive an adverse action notice after being denied credit, insurance, a loan, a rental home or employment.

Accessing consumer reports is your right

By Alegra Howard

What you don’t know may hurt you.

Ignorance is bliss in many cases in life—but not when it comes to the information companies compile and share about you. Whether it’s a traditional credit report or a specialty consumer report, under federal law—the Fair Credit Reporting Act (FCRA)—you have a right to know what information is collected about you and to once a year request a free copy of your consumer report. You also have the right to dispute any inaccurate information you find in these reports.

Adverse action

In addition to a free annual report, the FCRA says if your application for a rental home, insurance policy, loan or job is denied because of information in a consumer report, you can request a free copy of the report used as the basis for the denial, as well as the consumer reporting agency’s name and contact information.

By law, a bank or insurance company must provide you with the information you need to request a free report. You must ask for a free copy of the file within 60 days of a denial (adverse action). Consumers are advised to check the report carefully to ensure that the information is accurate. One in five reports contain big and small mistakes, according to a study by the Federal Trade Commission (FTC).

Disputing an error

If you spot an error in your consumer report, you have a right to dispute the inaccurate information. See our PDF directory for details on where and how to file a dispute with each specialty bureau.

While not required, it’s a good practice to contact the specialty reporting agency as well as the company that originally provided the wrong information. (These companies are called “furnishers.”)

For example, if ChexSystems has inaccurate information from Walmart that you bounced three checks in the past five years, you should contact ChexSystems as well as Walmart to correct the mistake. ChexSystems is supposed to forward the dispute to the furnisher, in this case Walmart, but it’s a good idea to contact the furnisher yourself. Under FCRA, both companies—the consumer reporting agency and the furnisher—are required to investigate consumer disputes, review any documents the consumer provides and correct mistakes. But persistence by the consumer often is required.

Once you file a dispute, the reporting agency typically has 30 days after they receive it to investigate your claim and correct any mistakes. You may—but are not required to—provide copies of documents that support your side of the dispute. (See the FTC’s sample dispute letter.) It’s a good idea to send letters of dispute by certified mail with a return receipt requested so that you’ll have proof that your dispute was received.

If the agency does correct your personal file as a result of your dispute, it must provide you with a free copy of your updated consumer report. (This free corrected report is in addition to the free report you are entitled to annually.)

If you ask, the consumer reporting agency must send notices of any corrections to any entity that received your report in the past six months. You can have a corrected copy of your report sent to anyone who received a copy during the past two years for employment purposes.

If your dispute remains unresolved, you can add a 100-word statement to your record that briefly explains the ongoing problem. You also have the right to contact an attorney—the FCRA provides for damages from inaccurate data that can be shown to have affected your life and prospects. Many attorneys who specialize in FCRA violations take cases without upfront fees (contingency) if they believe the case will be successful.

Freeze your file

Under the FCRA, those who want access to your consumer report must have a “permissible purpose.” This would include evaluating you for offers of credit, insurance, employment or housing. In some cases, consumers can prevent their data from being shared with third parties by placing a “security freeze” on their file. A security freeze prevents access to the information in your consumer report without your permission. Placing a security freeze may help prevent fraud and misuse of your personal data by giving you more control over your information.

Depending on your state’s law, it may cost you up to $20 each time you place or remove a security freeze from your file. Usually it’s free for victims of identity theft or seniors 65 and older. Placing a security freeze on your report not only limits others’ ability to review your record, but it could also limit your ability to quickly apply for instant credit and loans by extending the time needed to approve applications for credit, cell phone service, rental housing, insurance or other loans that rely on consumer reports for approval. However, you can lift the freeze when you want to apply for new credit.

Companies we found that allow consumers to freeze their records include: SageStream, LLC (free), Innovis (fee depends on state—up to $20), L2C (free), ChexSystems (free), Clarity (free), Teletrack (free), LexisNexis (Full File Disclosure report; CLUE report only in DE, ME, MN and NJ; fee depends on state), CoreLogic SafeRent (free), NCTUE (fee depends on state—up to $12) and LeasingDesk/RealPage (fee depends on state). See our guide for details.

Access issues

Usually, anyone who wants to access your credit report must obtain your consent. Lenders and insurance companies typically obtain consent to access your credit and financial history as part of the application process. Under the FCRA, prospective employers, landlords or home leasing agents who want to conduct a background check or check your credit or consumer files must obtain your express consent. Many people consent because, while they value their privacy, they don’t wish to lose an opportunity by withholding permission.

The majority of background check companies we reviewed explained that consumers would not be able to access their report before applying for a job or housing. This is because, in most cases, the report doesn’t exist until a company is hired to supply one. LexisNexis is an exception because it can pull together all identifiable information about you from its vast databases to create your public record file and two kinds of insurance reports (CLUE auto and property reports).

Medical information

Many of the medical specialty bureaus we reviewed must adhere to another federal law intended to protect consumers’ personal information: the Health Insurance Portability and Accountability Act of 1996 (HIPAA). In this era of digital correspondence, HIPAA requires consumers to specifically authorize what type of medical records they want shared, who is allowed to share the records and who is authorized to receive the information. But this doesn’t mean you have much control—to see a doctor or to use your health insurance benefits you are pretty much forced to authorize access. See our Web Bonus article Medical specialty reports: Decoding your data for insurers.

In data reports, accuracy is crucial, because significant decisions about you—financial and otherwise—often are based on the information in these files. Errors can cost you hundreds of dollars a year in premiums, restrict you from writing checks, block you from having “postpaid” mobile phone service or even prevent you from earning a living. Taking the time to check these reports can help you avoid problems in the future.

Your banking history can come back to haunt you

By Monica Steinisch

As much as you might like to leave past banking mistakes in the past, a handful of widely used databases ensure that consumers’ every banking misstep continues to dog them for years. Account verification and check verification reports reveal how consumers have managed their checking and savings accounts over the years. Even a single significant transgression can make it difficult or impossible to open a new bank account or pay by check, at least for a while.

Banking reports

Banking reports fall into two categories: account verification reports, used by financial institutions to determine whether to approve an application to open a new checking or savings account, and check verification reports, used by merchants to determine whether it’s safe to accept a consumer’s check.

Account verification reports. ChexSystems is, by far, the most widely used account verification report—80 percent of U.S. financial institutions consult ChexSystems before opening a new account. Banks and credit unions that subscribe to ChexSystems report account problems to the agency and request reports on consumers who apply for a new account. Banks say they use the reports to avoid financial losses from account fraud, unpaid fees and overdrafts.

Typically, ChexSystems records only negative activity, so simply having a ChexSystems report is a red flag to financial institutions, although victims of identity theft and account error also find themselves tagged with a negative file. A ChexSystems report includes data on bounced checks, accounts closed by the bank due to abuse or fraud, negative account balances and whether those balances have been repaid. (Simply overdrawing your account briefly isn’t enough to land you in the ChexSystems database.) The report also contains information on how many accounts you have applied for in the last 90 days, checks you’ve ordered in the last three years and whether you’ve reported a debit card lost or stolen.

Early Warning is the other account verification report. It bills itself as a fraud prevention service, and also provides check verification services. Many banks and credit unions subscribe to both ChexSystems and Early Warning.

Check verification reports. Certegy Check Services and TeleCheck are the two main check verification reporting agencies. They both tell subscribing merchants if a check presented for payment is likely to bounce or be fraudulent. Results are based on a consumer’s check writing history and patterns compared to other consumers. The merchant decides whether to accept or reject a check. Merchants have varying degrees of risk tolerance, so your check could be accepted by one merchant and rejected by the one next door.

Rightly or wrongly, reporting agencies make their predictions about the likelihood of check fraud by correlating transaction data about you, such as where you shop and what you buy, with “red flags” for fraud. These red flags include where fraudsters tend to shop, what they usually buy and how much they typically “spend.” These predictions do not take into account your credit history. Account and check verification reports have no affect on your credit scores.

Checking your reports

Under the Fair Credit Reporting Act (FCRA), you are entitled to one free report per year from any credit or specialty reporting agency (plus another free report if there’s been an adverse, or negative, action against you or you dispute an item in the report and a correction is made). However, ChexSystems told us that the company does not limit consumers to one free report per year.

Reasons to request a report include being denied a checking or savings account, having your check refused by a merchant, and knowing or suspecting that you’re a victim of identity theft. To learn how to request these free reports, see our directory.

TIP: Avoid revealing any more information than is required to identify yourself for each request. Many agencies ask for additional, nonessential details just to collect more information about you for their databases. For example, the agency doesn’t need to know where you work, so avoid revealing your employer.You may be able to avoid the whole report ordering process if you simply want to know why a particular check was declined. Both Certegy (866-543-6315) and TeleCheck (800-366-2425) will answer that question by phone. Certegy also allows you to do a Declined check lookup online. Certegy provides a reason code ranging from 1 to 5. Each number reveals the general reason for a rejection. For example, a “1” indicates there is negative information in your file, while a “2” means there is no negative data but there might be insufficient information or your check amount exceeded a predetermined limit. A “3” means your ID or check information did not meet guidelines. TeleCheck assigns its own set of codes.

Like the major credit bureaus, ChexSystems converts the information it has about you into a score and offers it for sale.

The ChexSystems QualiFile score combines the data in your ChexSystems report with data from traditional credit reports and other sources (LexisNexis Personal Reports, for example) and boils it all down to a number between 100 and 899 that reflects your level of risk to a bank. The higher your score, presumably the more likely you are to be a responsible bank customer in the future.

Having a lower score doesn’t mean you won’t be able to open a bank account, but it could mean higher fees or more restrictions, like limited check-writing privileges or no debit card. Each bank decides its risk level qualifications. Consumers can purchase a ChexSystems QualiFile score for $10.50.

Free brochure

In addition to our new Insider’s Guide to Specialty Consumer Reports and companion directory, Consumer Action offers other materials that explain the types of specialty reports available, what rights and protections consumers have and how to make the most of these specialized files. See our Consumer Reports and Specialty Reports brochure. The brochure is part of Consumer Action’s free Credit Reports, Credit Scores and Specialty Reports training module.

The brochure is available in Spanish, Chinese, Korean, Vietnamese and English.

Do you have a CLUE?

One of the least known specialty reports included in Consumer Action’s new directory is the CLUE (Comprehensive Loss Underwriting Exchange) report. CLUE is a personal property claims database that generates reports for insurance companies to allow them to evaluate and price (underwrite) insurance policies. Information in the report includes your previous homeowners or auto insurance claims (date, type and cost of the loss).

What you might not expect to find in the report is information about losses that you did not make a claim on. The reality is, if you contact your insurance company or agent to discuss coverage on a specific loss—even if you decide not to file a claim—the incident could be included in a CLUE report. Inquiries are generally not included in the report, but can end up there if the inquiry is about an actual loss that could, potentially, become a claim. Claims that are filed but denied payment will also be in the database.

Information stays in your CLUE report for seven years (others’ requests for your report remain for two years), which could make it difficult for you to get insurance or renew your policy, or cause you to pay more for coverage.

Note: To avoid the “ding” of an inquiry on your CLUE report, it’s important to speak to your insurer only in general terms unless you plan on filing a claim. You might even tell the agent or representative directly that you are only making an inquiry, or otherwise make clear that the loss you are asking about is purely hypothetical. Once you disclose that a loss has occurred, it could end up included in your report. Some states, like California, prohibit insurance companies from using your coverage inquiries as the basis for negative, or adverse, action for homeowners insurance.

Under the federal Fair Credit Reporting Act, you’re entitled to a free copy of your CLUE report. Call 866-312-8076 to use an automated ordering system, or visit the company's website to order online. Required information includes your Social Security number and date of birth, along with your current and former addresses (if you have lived in your current home for less than five years) and your driver’s license information.

Major bank limits use of ChexSystems as screening tool

By Monica Steinisch

Millions of consumers who’ve been locked out of opening a bank account will now have at least one major bank available to them.

Capital One has announced that it would stop using ChexSystems to reject bank account applicants based on a history of bounced checks and overdrafts—if the report does not indicate previous fraud. This is significant because many unbanked households want to open a checking account but are not able to because they are essentially blacklisted because of ChexSystems.

The inability to access mainstream financial services forces many low-income consumers to use expensive, predatory check cashing stores to pay a bill or cash a check.

Capital One’s policy change is the result of an agreement with New York State Attorney General Eric Schneiderman, whose office investigated major banks’ screening processes that might hurt low-income consumers and identity theft victims. (The Consumer Financial Protection Bureau, too, is monitoring banks’ use of specialty reports amid concerns that they unfairly restrict low-income consumers’ access to the banking system because of minor financial missteps, inaccurate data or identity theft.)

Capital One’s new policy is expected to take effect at its branches nationwide by the end of the year. While it will no longer use ChexSystems to predict credit risk, it will continue to use the report and conduct background checks to look for previous fraudulent activity.

The New York Attorney General’s office also sent letters to Bank of America, Citigroup, JPMorgan Chase and Wells Fargo inquiring about their use of ChexSystems and similar reports to screen account applicants. Consumer advocates are hoping that other banks will follow Capital One’s lead.

‘Blacklisted’ on ChexSystems?: You might have some options

By Monica Steinisch

Some banks are relying less on ChexSystems reports (see previous story) in response to a backlash against excessively restrictive account opening policies that disproportionately harm low-income consumers. But for most financial institutions, the report remains a key factor in the account approval process. Derogatory (negative) information drops off of ChexSystems reports after five years, but that’s still an unbearably long time to try to get by without a checking account. Fortunately, there are some options for overcoming the barrier to banking that a ChexSystems file creates.

Order a free ChexSystems report. If you have bounced multiple checks, left an account owing a balance, or accrued unpaid overdraft fees in the last five years, learn who you owe money to and how much. While you’re at it, check for any errors, and dispute them, too. Only the bank that placed an item on your report can remove it, and it doesn’t have much incentive to do so. Still, it’s worth contacting the bank and asking if it will remove the item if you pay off a debt you owe. Even if it won’t, it’s less detrimental to have a paid item on your ChexSystems report than an unpaid one. Visit ChexSystems to order your free report (if one exists).

Tell your side of the story. You have the right to add a personal statement to your report explaining any damaging history. The goal of your statement should be to reassure anyone who looks at the report that you are not a risk and will be a responsible customer. If circumstances beyond your control caused you to overdraw your account, point that out.

Shop around. If you are denied an account at one bank, you may have better luck at another. Community banks and credit unions sometimes have more forgiving policies. You might also find a bank that doesn’t use all the data in its decision-making process or doesn’t weight older items as heavily. For example, a bank or credit union might have a policy of opening an account if a debt has been repaid and is more than two or three years old, as long as there are no fraud-related items in the report. Some banks will open accounts if the old debt was with another bank. When shopping for an account, bear in mind that multiple ChexSystems inquiries can result in account rejections and add negative marks to your report.

Get a second chance. Some banks and credit unions offer “second chance” accounts for consumers who don’t qualify for a standard checking account. These accounts typically have a higher monthly fee or impose certain restrictions. For example, you might not get a debit card right away or you might have a limit on the number of checks you can write each month. Some accounts are checkless prepaid accounts with no overdraft option. Over time, as you demonstrate responsible account management, you should qualify for a more traditional account.

NerdWallet provides a list of second chance accounts. (Click here to visit NerdWallet.) You can also search online for “second chance checking” plus the name of your state or city.

Once you get a new checking account, establish a habit of tracking your balance to avoid overdrafts and using tools like low balance text message alerts. Also sign up for an overdraft protection program (not the bank’s automatic “courtesy” overdraft service) to help you avoid the highest of overdraft fees.

“Bank On” programs also offer second chance accounts and opportunities for those without traditional accounts to access banking services. Click here for more information and locations.

Medical specialty reports: Decoding your data for insurers

By Michelle De Mooy

Medical specialty reports disclose your health information, such as your surgical history, pharmaceutical history and diagnostic history. Companies request profiles of applicants and use the details they find in specialty medical reports as a way to determine their risk of doing business with you, whether it’s approving your application for life insurance or giving you a job.

MIB Group Inc., one of the largest specialty consumer reporting agencies in the country, gathers details about people’s health histories, scores the individual as a high or low risk based on medical history, and sells this to inquiring insurance companies. MIB maintains records only about individuals who have applied for individual health-related insurance (life, disability, long-term care), outside of a group plan, in the last seven years.

MIB gathers information from insurance companies and data from medical test results, obtained from forms or applications you may have filled out, and compiles detailed dossiers about health conditions, lifestyles, illnesses and accidents. Information is translated into brief medical codes. Companies must obtain a consumer’s written permission before codes are shared with insurers. MIB sells its coded reports only to MIB member companies that wish to determine if an applicant qualifies for long-term care, life or disability insurance, and which rates to offer.

MIB reports do not include your actual medical records.

MIB, Milliman IntelliScript and OPTUMInsight MedPoint are the big three medical specialty reporting agencies. While MIB focuses solely on the medical history of individuals who’ve applied for insurance, the other two agencies gather prescription drug histories from pharmacy benefit managers (like CVS). These agencies narrow their focus to specific information in a person’s prescription history, including details about dosage, number of refills, name and address of the dispensing pharmacy and prescribing doctor and diagnoses associated with the prescriptions.

Purchasers of specialty medical reports frequently purchase drug history reports as well because information about your health may be gleaned from these reports that is not reflected in your medical report. While this information can’t be used to deny you medical insurance (pre-existing conditions are not cause for denying coverage or raising rates under Obamacare), it can be used by insurers evaluating you for life, disability and long-term care coverage. After reviewing your prescription drug history, insurers will make some assumptions about your underlying medical conditions and weigh the risk of insuring you.

Each agency has a unique system of scoring a consumer’s health history but all assign higher numbers or color-coded alerts when a profile indicates that the consumer’s care might involve more expensive treatment, such as prescriptions for chronic illnesses. According to this system, the higher a score given to an applicant, the higher the risk, therefore the more expensive they are to insure.

Privacy

The most effective way to keep health information out of these reports is by refusing to sign consent for data use on an insurance application. But that may not be all that practical. As required by the Health Insurance Portability and Accountability Act (HIPAA), most of the data collected by specialty reporting agencies must come with a patient’s consent. Insurance applications require this consent for the application to be processed, giving consumers little real choice in the matter if they want to purchase insurance. Also, HIPAA does not hold prescription history reporting companies, like Milliman IntelliScript or OPTUMInsight MedPoint, to high privacy protection standards, making it difficult for consumers to know how their health data is being safeguarded.

Consumer Action’s Health Records Privacy in California publication offers guidance on how to navigate medical privacy and ID theft concerns. Click here to view the fact sheet.

The Fair Credit Reporting Act (FCRA) offers some protections for consumers regarding specialty medical reports. The FCRA requires companies to provide notice, a free copy of the report and an opportunity to dispute the accuracy of a report for consumers who are denied coverage because of information found in a specialty medical report. Applicants for individual life, long-term care or disability insurance should request and review a copy of their specialty medical report, such as MIB, prior to applying. Federal agencies like the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) are closely watching the practices of specialty reporting agencies to ensure they are following the FCRA and have publicly stated that they will impose stiff fines and penalties against reporting agencies that are not complying with the law.

Victims of identity theft should consider ordering a medical specialty report to make sure their information is accurate and there is no sign of fraud. Thieves can use stolen personal information to impersonate you to get health care and insurance. Increasingly, scammers are using phishing emails, fraudulent websites and bogus apps to gather personal health information. Be careful what information you reveal in “age quizzes” that you fill out while on social networks, for example. These types of promotional ads ask about your age, race, ethnicity, marital status, employer, and personal habits such as smoking or drinking.

Consumer Action’s ID Theft & Account Fraud module provides more detail on what to do when you are a victim of ID theft. Click here to view the fact sheet.

Note: To request a free report from each of the three medical and prescription specialty reporting agencies, click here. (Be aware that you’ll need to provide personal information, such as Social Security number and date of birth.)

Alternative credit reports: Options for the ‘credit invisible’

By Ruth Susswein

If you are one of the estimated 88 million people who have no loans or credit cards, you may have a spotless record of paying your bills but no way to show it.

To remedy this, you can create an alternative credit report that will give you credit for on-time payments for your cellphone, gas and electric service, insurance, cable TV and rent.

Companies like Microbilt’s Payment Reporting Builds Credit (PRBC) offer the chance to build alternative credit reports for those with limited, or “thin,” credit files. This can help build a payment profile that can be presented to demonstrate your financial responsibility when applying for lines of credit, loans and a place to live.

PRBC

Here’s how it works: You create a PRBC account by supplying personal (address, income, SSN) and payment information for at least three of your monthly bills, such as your mobile phone, rent, Internet service, etc. You give PRBC permission to electronically link to those accounts to verify your bill payments, and it creates a score based on your good payment history. The company makes that alternative score available to prospective creditors. The PRBC account, report and score are available online for free to consumers. Note: While you don’t pay cash for these products, you do pay with the information you provide about yourself, which is valuable to marketers and data brokers.

Similar to traditional FICO credit scores, a PRBC score ranges from 300-850. According to the company, any score over 750 will be considered “extremely reliable” in terms of repayment and under 600 will “likely be denied credit.” The alternative credit bureau says the more data consumers supply, the higher their scores can be. The score reflects your timely payments, length of payment history, time since the most recent late payment and severity of late payment.

A full, free PRBC consumer report is composed of: the account history you supply; a credit score called a FICO Expansion Score, which reflects nontraditional payments; a short-term lending score (payday loans); bank account information; employment data; and property, bankruptcy, foreclosure, judgment and eviction records.

A wide variety of companies, including furniture stores, auto dealers, banks, and rental and leasing agents, use PRBC reports to check consumers’ backgrounds. Consumers can search for lenders that accept the PRBC score under the “Find a Lender” section of the website and use the site to discover how much credit they might qualify for. If they are applying outside of the PRBC network, consumers can print out their PRBC score and report and take it to prospective lenders. PRBC also offers electronic bill payment at no charge. The company makes money from its subscribing lenders.

Credit Builders Alliance

The organization Credit Builders Alliance (CBA) helps small, non-profit community lenders (community development financial institutions) report clients’ loan performance to two major credit reporting bureaus (Experian and TransUnion). This can help people in underserved communities build good credit histories.

A Credit Builders Alliance pilot project works with affordable housing organizations to report rental payments to Experian. Preliminary results show positive increases in credit scores among these tenants.

“Experian’s analysis of loan recipients showed that over 73 percent of predominantly low-income and minority loan recipients have increased their active, open [lines of credit],” said CBA Executive Director Dara Duguay. “This proves that the reporting of one new tradeline [line of credit] to a major credit bureau positively impacts a consumer’s ability to qualify for additional forms of credit.”

Other companies, like LexisNexis Risk Solutions and L2C Inc., also generate alternative reports, but they gather your payment history details from the source, like phone or cable companies, landlords, banks and others you’ve done business with.

L2C creates a score to predict the risk consumers with few or no traditional credit records may pose in repaying financial, utility, health care and rental companies.

LexisNexis RiskView Solutions creates a score based mostly on information from public records that evaluates consumers’ stability, ability to repay and willingness to repay.

Rent tracking

Two of the Big Three credit bureaus, Experian and TransUnion, are expanding their ability to record rental payments for a more complete picture of underserved consumers in their database.

If your landlord does not report rental data to Experian RentBureau, you can add your positive payment history through an electronic rent payment service such as ClearNow, RentTrack or WilliamPaid. For example, tenants may open an account with RentTrack and pay their rent online for a $1.95 monthly fee. The payment record will be reported to major credit bureaus.

Tenant payment histories also can be reported via ResidentCredit, a free service from TransUnion. It asks participating property managers to submit rental payment records to the credit bureau. TransUnion has released research that shows that the reporting of rental data can be beneficial for most subprime consumers (those with a tarnished credit history or thin credit file). Their analysis showed that eight in 10 subprime consumers saw an increase in their VantageScore credit score. (VantageScore is the name of a credit rating product that was created by the three major credit bureaus to compete with the most widely used FICO score.) ResidentCredit can be used only if landlords are willing to supply rental payment data.

The Fair Credit Reporting Act gives you the right to access your credit and specialty reports, including your alternative credit history data, at no charge once a year. ResidentCredit rental data appears as an account in your TransUnion credit report. RentTrack data appears on your Experian and TransUnion reports. Order your free credit report from all of the Big Three bureaus at AnnualCreditReport.com.

About Consumer Action

Consumer Action is a non-profit 501(c)(3) organization that has championed the rights of underrepresented consumers nationwide since 1971. Throughout its history, the organization has dedicated its resources to promoting financial and consumer literacy and advocating for consumer rights in both the media and before lawmakers to promote economic justice for all. With the resources and infrastructure to reach millions of consumers, Consumer Action is one of the most recognized, effective and trusted consumer organizations in the nation.

Consumer education. To empower consumers to assert their rights in the marketplace, Consumer Action provides a range of educational resources. The organization’s extensive library of free publications offers in-depth information on many topics related to personal money management, housing, insurance and privacy, while its hotline provides non-legal advice and referrals. At Consumer-Action.org, visitors have instant access to important consumer news, downloadable materials, an online “help desk,” the Take Action advocacy database and nine topic-specific subsites. Consumer Action also publishes unbiased surveys of financial and consumer services that expose excessive prices and anti-consumer practices to help consumers make informed buying choices and elicit change from big business.

Community outreach. With a special focus on serving low- and moderate-income and limited-English-speaking consumers, Consumer Action maintains strong ties to a national network of nearly 7,500 community-based organizations. Outreach services include training and free mailings of financial and consumer education materials in many languages, including English, Spanish, Chinese, Korean and Vietnamese. Consumer Action’s network is the largest and most diverse of its kind.

Advocacy. Consumer Action is deeply committed to ensuring that underrepresented consumers are represented in the national media and in front of lawmakers. The organization promotes pro-consumer policy, regulation and legislation by taking positions on dozens of bills at the state and national levels and submitting comments and testimony on a host of consumer protection issues. Additionally, its diverse staff provides the media with expert commentary on key consumer issues supported by solid data and victim testimony.