Credit Reports According to Obringer

Credit Reports According to Obringer (n.d.), "a credit report is an accumulation of information about how you pay your bills and repay loans, how much credit you have available, what your monthly debts are, and other types of information," (p.1). Because of the sensitivity of the data contained in a credit report, they can be frightening documents. A credit report can be used against an individual in obvious ways, such as denying a loan or a lease agreement. Malicious users who steal identities can also misappropriate credit report data.

Yet in spite of the genuinely scary power that a credit report has, they are useful compilations of data. For the most part, credit reports are safe and confidential. Although it seems that anyone can have access to a person's credit report, there are still ways consumers can protect against identity theft. Credit reports are especially useful for businesses that depend on making sensible loans. It would be nearly impossible to conduct transactions on credit without knowing anything about the creditor.

Credit reports reduce instances of fraud, by helping banks and other lenders verify the credibility of the applicant. Regardless of how the consumer perceives the validity of credit reports, they are an inescapable fact of life in the modern economy. Therefore, credit reports are a useful, safe, and effective means of participating in capitalist society. Credit reports in the United States are standardized by consumer reporting agencies, which offer a straightforward way of disseminating valuable information about a credit applicant.

Consumer reporting agencies are private enterprises in the business of collecting and selling financial information. As such, consumer-reporting agencies are among the earliest examples of the shift from traditional to information-based economies. In the same way that Google helps to simplify browsing the Web, consumer reporting agencies help businesses learn about their loan applicants. Obringer (n.d.) claims that the first consumer reporting agencies were established in the 1830s, "were one of the first businesses that were national in scope, and actually functioned much like a modern-day franchise," (p. 2).

Because consumer reporting agencies have been around for nearly two centuries, they have developed methods of standardization that streamline the capitalist process. Standardization facilitates business growth and development by making processes more efficient. Standardized credit reports make it much easier for both businesses and consumers to conduct transactions. Consumers can use their credit reports to become armed with knowledge about information privacy. Credit reports contain sensitive data related to borrowing money, including nearly every loan that has been applied for, approved of, or denied.

Consumers should indeed be concerned that a malicious user might take control of the sensitive information contained in a credit report. To learn more about how to protect personal data, consumers can take advantage of Internet resources such as the Privacy Rights Clearinghouse and the Electronic Privacy Information Center. According to the Electronic Privacy Information Center (n.d.).

"credit reports…are subject regulations that follow a framework of Fair Information Practices." Fair Information Practices and other federal regulations are designed to protect the consumer against identity theft, while also ensuring the right to access personal data. The consumer can learn about the various ways credit reports may -- and may not -- be used by reading credible source data online or in print publications. One of the ways consumers can empower themselves is to gain access to their own credit reports.

Access to one's own credit report is easily obtained online, by paying a fee to one of the credit bureaus or consumer reporting agencies. Gaining access to one's personal data is a proactive step towards the protection of one's privacy.

As the Privacy Rights Clearinghouse (n.d.) puts it, "Ordering your credit report once a year and knowing your credit reporting rights are among the most important steps you can take to safeguard your privacy." Once a year is only a guideline; some individuals might need to order their credit reports often if they have been conducting numerous transactions. Some consumers rarely use credit cards, let alone ask banks for loans. Such people should still order their credit reports with relative frequency.

Ordering credit reports is one of the most important steps a business can do to protect itself, too. Businesses cannot be expected to lend money on faith alone. Businesses need to have access to the standardized credit report data that is available to them.

As Obringer (n.d.) states, "having all of the information helps them ensure that they are making the right decision." A credit report does not contain any advice in it; a business can make its own decision on whether or not to accept a loan applicant based on its tolerance for risk. Lenders have the right to access the consumer's information, just.