Specialty consumer reports: ChexSystems, tenant screening and more

A bank turns down your checking account application, and your first thought is your credit score. But the score may never have come up. Many banks screen applicants through a separate database of bank account history, and if an old account was closed with a negative balance, that file is what said no.

The three credit bureaus are the files everyone talks about. Dozens of other companies keep consumer reports too, and they quietly sit behind decisions about bank accounts, apartments, insurance premiums, utility deposits and jobs. Most people never look at them until something goes wrong.

The reports behind everyday decisions

The FCRA gives a specific name to the companies that do this on a national scale. A “nationwide specialty consumer reporting agency” is one that compiles and maintains files on consumers nationwide relating to one of five subjects: medical records or payments, residential or tenant history, check writing history, employment history, or insurance claims (15 U.S.C. 1681a(x)). Other specialty companies fall outside that definition but are still consumer reporting agencies with FCRA duties.

The CFPB maintains a list of consumer reporting companies sorted by what they cover. These are the common categories and the decisions they feed into:

Each one holds different data. A bank screening file can record an account closed for an unpaid overdraft. A tenant screening report may pull in eviction filings and court records. A claims report lists insurance claims tied to you or a property. None of it necessarily shows up on your Equifax, Experian or TransUnion report.

Your right to a free copy

Under 15 U.S.C. 1681j(a)(1), nationwide specialty consumer reporting agencies must give you your file disclosure free once during any 12-month period on request, through a streamlined process that includes at least a toll-free number. Some companies go further: ChexSystems, for example, says it provides consumer disclosure reports and consumer score reports free of charge.

You also have free-report rights that apply more broadly:

• After an adverse decision. If you request it within 60 days of a notice that a report led to an adverse action, the agency must give you a free disclosure (1681j(b)).
• In certain circumstances. One free disclosure per 12 months if you certify in writing that you’re unemployed and plan to look for work within 60 days, you receive public welfare assistance, or you believe your file has errors due to fraud (1681j(c)).

The catch is logistics. AnnualCreditReport.com covers only the three nationwide credit bureaus. Every specialty company has its own request process, so start from the CFPB’s list, which links to each company.

Which reports to pull, and when

You don’t need every report every year. Pull the ones tied to a decision you’re about to face.

• Before opening a bank account, especially after a past account closure: ChexSystems and Early Warning Services.
• Before apartment hunting: ask landlords which screening company they use. Tenant screening is fragmented, and our guide to apartment applications covers what landlords look at.
• Before buying a home or switching insurers: your C.L.U.E. claims history, since insurers use it when quoting home and auto policies.
• Before setting up utilities in a new place: NCTUE.
• Before a job search: The Work Number, plus any background check report the employer uses. See credit checks for jobs.

Example: tracking the free windows

The 12-month window runs per company, so a simple calendar keeps you from overlapping requests. Say you plan to move next August and pull reports in this order:

If a bank denies you in October, you don’t have to wait until January: an adverse action notice opens a separate free request for 60 days.

Fixing errors in a specialty report

The dispute rules in 15 U.S.C. 1681i are written for consumer reporting agencies generally, not only the big three. If you dispute the accuracy or completeness of an item, the company generally has 30 days to investigate and must correct or delete information that’s inaccurate or can’t be verified. If the investigation doesn’t resolve it, you can add a brief statement of dispute.

Specialty files carry their own common errors:

• Name-only matches in tenant screening. A court record for someone with your name gets attached to you. The accuracy duty in 15 U.S.C. 1681e(b) requires reasonable procedures to assure maximum possible accuracy, so dispute with your date of birth and other identifiers that rule the other person out.
• Bank screening records for debts you settled. If you paid an old negative balance, get a letter from that bank and dispute any record that still shows it unpaid.
• Claims attached to the wrong policyholder or property. Dispute with the claims company and ask the insurer that reported it to correct its data.

When you’re denied, the adverse action notice should name the company whose report was used. That tells you exactly which file to request and dispute.

Freezing the files nobody mentions

Freezing your three credit reports doesn’t freeze these. On the CFPB’s list, NCTUE and LexisNexis C.L.U.E. are both marked as offering free reports and freezes. A freeze can block new account openings by someone using your identity, though it can also slow you down when you’re the one applying. Our guide to freezing all the bureaus walks through the less obvious ones.

What to do this month

1. Open the CFPB’s list of consumer reporting companies and note the ones tied to a decision you expect this year.
2. Request your bank screening report first if you’ve had an account closed in the past.
3. Read each report for accounts, records or claims that aren’t yours or are reported wrong.
4. Dispute errors in writing with the company that issued the report, with copies of your proof.
5. Keep a simple log of which report you pulled and when, so you know when each free window reopens.