Understanding Credit Reports vs. Investigative Consumer Reports

Credit Reports vs. Investigative Consumer Reports: An Overview

Investigative consumer reports receive a lot less notoriety than consumer credit reports, probably because you are far more likely to have your credit report pulled than to have a full-blown investigative consumer report performed about you. There are some major similarities between these two types of reports; both are an evaluation of your individual risk profile, employers or financial institutions perform them, and they are regulated through the Fair Credit Reporting Act or FCRA. However, there are important differences as well.

Investigative Consumer Reports

Think of a very detailed background check with an investigative consumer report. These reports get personal: they can include interviews with co-workers or neighbors about your character and your reputation, your lifestyle and honesty are called into question, and your relationships with friends, family, and your community are all scrutinized, among other factors.

Key Takeaways

  • Lenders typically pull credit reports when you attempt to borrow money.
  • Investigative consumer reports, which require approval from the individual, are often more detailed than credit reports.
  • Investigative consumer reports are not usually for evaluating creditworthiness, but are more concerned about judging an individual's character for licensing, tenancy, or employment.

Investigative consumer reports are not really used to evaluate your creditworthiness. If fact, information from your credit report cannot be used in an investigative report. The FCRA distinguishes reports on personal character from credit reports, and a lender may not pull an investigative report as part of the credit-granting process.

Anytime an investigative report is pulled about you, a notification is sent through the mail asking your permission. Per federal law, no investigation may be conducted without your approval. However, failure to accept the investigation likely means automatic denial for whatever you may have been applying for, such as tenancy, licensing, and employment.

Consumer Credit Report

Credit reports are compiled about you almost automatically through lenders and credit reporting agencies. Files of information about your debt levels, repayment history, and assumed creditworthiness are housed with credit bureaus, especially with the three major ones: Experian, Equifax, and TransUnion.

Your credit score acts like a quantified summary of parts of your credit report, making it important for the information contained in these files to be accurate. Per federal law, once per year, you are allowed to obtain each of your credit reports for free. There you will find a summary of your personal credit history.

Not everyone can look at your credit report; the FCRA requires companies to prove they have a viable business interest in your credit history before they can pull your report. Permissible uses of your credit report include applications for rentals, insurance, or credit; employment decisions; court orders; periodic reviews by your financial institutions; professional licensing decisions; child support determinations; and law enforcement or counter-terrorism investigations.

The Bottom Line

Credit reports are pulled by nearly anyone you attempt to borrow money from, as well as landlords, employers, and other businesses. Investigative consumer reports are pulled less frequently by fewer kinds of businesses and for a broader range of information. You are far more likely to have your credit report reviewed than have an investigative consumer report performed. If you have concerns about information being pulled, contact the Federal Trade Commission, or FTC, about your rights under the FCRA.

Article Sources
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  1. Consumer Financial Protection Bureau. "CFPB Consumer Laws and Regulations," Pages 2-5. Accessed Sept. 10, 2021.

  2. Consumer Financial Protection Bureau. "CFPB Consumer Laws and Regulations," Pages 6-7. Accessed Sept. 10, 2021.

  3. Federal Trade Commission. "Get My Free Credit Report." Accessed Sept. 10, 2021.

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