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What is a credit report? The answer isn’t quite as simple as it sounds. By the end of this story, you’re going to learn about a different set of reports chock-full of data about you, and how you can see them. But first, we’re going to discuss a new kind of lending that might lead to a whole new category of free credit reports.

You probably know about the Big Three — Experian, Equifax and TransUnion — and the credit reports they have on you. Hopefully you know you can see those credit reports for free once each year, and you have the right to dispute errors.

But there are many other kinds of credit reports, too. They are lesser known, but can be just as important. Sometimes called “specialty” credit reports, they cover other aspects of your life. The CLUE (Comprehensive Loss Underwriters Exchange) Report, for example, keeps track of auto or homeowners claims you’ve made. If your home insurance seems unusually expensive to you, the first thing you should do is get your CLUE report, which you can do for free.

The issue of specialty credit reports took on some new urgency this week as the National Consumer Law Center released a report called “Big Data: Big Disappointment for Scoring Consumer Credit Risk.”

The report examines a new segment of the small loan industry that is looking to compete with payday lenders. Firms with names like LendUP and MySalaryLine are inventing new business models for short-term, emergency lending products. In a typical example, a consumer borrows $500 for two weeks, and the amount is deducted from subsequent pay checks. The interest rates are very high — ranging into triple digits — but proponents claim the loans don’t trap borrowers into repeat cycles the way payday loans do.

Who’s Selling Your Data?

What does this have to do with credit reports and your rights? These new lenders say they use Big Data to determine the creditworthiness of potential borrowers, and by Big Data they mean everything from Facebook posts to average salary in your ZIP code. Some of the data comes from data brokerage firms like Intelius or Spokeo.

A quick moment for a definition: Data Broker is a catch-all term for a wide group of companies that include everything from marketing giant Acxiom to the kind of sketchy stalk-your-ex-girlfriend websites you find through Google. The distinction is inexact, but the difference between credit reporting agencies and data brokers is basically this: If the firm sells your data for use in determining credit, housing, job applicant status, etc., then it’s a credit reporting agency. If the firms sells your data for marketing, it’s not a credit reporting agency.

That matters a lot, because credit reporting agencies are subject to the Fair Credit Reporting Act and its amendments, which give consumers a long list of rights. Chief among them: Rights to see their reports and dispute errors. As you might imagine, the Fair Credit Reporting Act and its expensive, pro-consumer requirements are something that data brokers probably don’t want to wrangle with.

Intelius, for example, tries to make this abundantly clear in its fine print: “You shall not use any of our information as a factor in establishing an individual’s eligibility for personal credit or insurance or assessing risks associated with existing consumer credit obligations,” it says in its terms of service. “Intelius is not a consumer reporting agency as defined in the Fair Credit Reporting Act.”

Spokeo’s similar terms prohibit use of its data “to evaluate a consumer’s eligibility for credit or insurance to be used primarily for personal, family, or household purposes, to evaluate a person’s eligibility for employment or volunteering purposes, to evaluate a person’s eligibility for a government license or benefit, to evaluate a person for renting a dwelling property, or for any other purpose specified in the Fair Credit Reporting Act.”

Other data brokers cited in the NCLC report as claiming they are not covered by the Fair Credit Reporting Act include Accurint for Collections and Rapleaf.

The so-called Big Data lenders do not reveal details of their data collection strategies, other than to say they examine hundreds of pieces of data when determining the creditworthiness of a potential borrower. This is important because up to 60 million Americans don’t have traditional credit reports.

In its report, the National Consumer Law Center claims that if big data lenders use information from data brokers, that would make the brokers subject to the Fair Credit Reporting Act. Today, to obtain a report from one of these firms, a consumer must pay for it. If they were subject to the Fair Credit Reporting Act, it would be free, as it would be considered a specialty report.

The NCLC report does not say the lenders are using any particular data broker for information; it states merely that wherever the information comes from, that database must be considered covered by the Fair Credit Reporting Act.

Spokeo has run into allegations in the past that its data was used for prohibited purposes.  In 2012, the firm paid $800,000 to settle charges from the Federal Trade Commission after it alleged that Spokeo marketed its data to human resource departments for help in hiring decisions, in violation of the Fair Credit Reporting Act.

Getting Your Specialty Reports

For now, data broker reports are not subject to Fair Credit Reporting Act requirements, which means you aren’t entitled to a free peek at their data every year. But numerous other reports are available to consumers, and you should check them once each year. Here’s a list of specialty data reports you may consider pulling.

[Editor’s Note: If you’re interested in understanding how your credit profile feeds into your credit scores, the free Credit Report Card will update two of your credit scores every month for free and give you a breakdown of the major factors impacting your scores.]

More on Credit Reports and Credit Scores:

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