Get to know these alternate credit bureaus

Most adults in the United States are familiar with Equifax, Trans Union and Experian. These are the "Big 3" credit bureaus in the United States.  In the consumer law profession, we call credit bureaus "Credit Reporting Agencies", or CRAs for short, because that is the term used in the Fair Credit Reporting Act. 

Most people don't know that there are man more consumer reporting agencies other than the Big 3.  One of them, Innovis, is trying to catch up to the Big 3, and I have heard the term "Big 4" to include Innovis. 

Most of the alternate credit reporting agencies have a niche specialty, for example focusing on rent history as a tool for landlords to screen tenants.  Rental bureaus in clude Tenant Data Services and Corelogic Saferent.  Bureaus relating to acceptance of checks and screening for opening of bank accounts include Telecheck, Chexsystems and Certegy Credit Services. 

Linked Here is a table of alternative credit bureaus at Wallethub.com.  You should not consider this list to be exclusive though.

The most important thing to remember when dealing with special purpose credit bureaus is that, for the most part, they have to comply with all the laws and regulations concerning credit reporting that apply to the Big 3.  This means that you should be entitled to a free annual report upon request, you need to be notified when data from the bureau is used to deny you credit or insurance, or if you are charged more because of the data.  You have the right to dispute inaccurate information in your credit file, and the CRA has the duty to conduct a reasonable inquiry upon receiving a dispute.

You have special rights when it comes to reports used for employment screening ("investigative reports" under the FCRA).  These rights include the right to be told in advance and in writing that an investigative report will be done, and to be notified of your rights to dispute the results of the investigative report.  Prospective employers often violate these provisions.   Sometimes landlords commission what is in fact an investigative report. In these cases special procedures must be followed as well. 

Lately we have been investigating complaints from former auto dealers that information from a business database the "KO Book" has been used to screen them from jobs in the auto industry.  Our working theory is that to use the business database in this way violates the Fair Credit Reporting Act, and perhaps the database publisher and the prospective employer are liable for misuse of the information.  If you have been denied employment due to the KO Book, please contact me. 

Fighting Telecheck and Chexsystems

There are a number of "special purpose" credit reporting agencies that people may run into from time to time. There are agencies that specialize in reporting to landlords about tenants. There are business credit reporting agencies. Finally, there are Telecheck and Chexsystems.  

These last two are the ones I want to talk about.  Telecheck provides info to merchants at point of service regarding taking a patron's check.  As far as I can tell, with actual paper checks going the way of the dodo bird, Telecheck seems to also be fading into the background.  I had gone years without a complaint about Chexsystems also until recently.  Banks use Chexsystems to screen applicants for new checking accounts. Banks report on history with checking accounts much like merchants report on the history of a consumer using credit.  

Understand these key points about special purpose credit reporting agencies. When you are turned down for writing a check (Telecheck) or opening a bank account "Chexsystems", the party that turns you down has to give you written notice of the reason you were turned down, and give you information on the party they got the information from and the address where to get a copy of the report and how to dispute it.   Firms that turn you down are not very good about giving you this notice, and when they don't, you may be able to sue them under the Fair Credit Reporting Act.  You aren't going to break the bank. ($1000 or less in most cases),  but you can sue.  If this happens to you, and you are in Indiana, feel free to give me a call at 317-662-4529 or If you are out of Indiana, go to the NACA find an attorney page, at http://www.consumeradvocates.org/find-an-attorney

You can get a free copy of your Chexsystems report from Chexsystems' dedicated site,  You should NOT file your dispute online though. You should file it by certified mail with confirmation of delivery.  

I strongly suggest that you get your report and review it before you submit your dispute. If you don't you're guessing about what is on the report, and there is no need for that.  

When I have time, I will try to supplement this post.  In the meantime I'm going to give you some links to outside sites.  

Here's the consumeraffairs.com for general information on Chexsystems.

https://www.consumeraffairs.com/chexsystems-news

Stikedebt.org has some letter sthat you can send to Telecheck and Chexsystems. I haven't vetted these letters, but they might be useful

http://strikedebt.org/drom/appendix-b/

You can complain about the special purpose credit bureaus, and the companies that turn you down without notice or the opportunity to challenge the decision to the Consumer Financial Protection Bureau. Here's the CFPB's complaint page.

http://www.consumerfinance.gov/complaint/

Here's a link to a page that touts 9 banks that don't use Chexsystems.  These pages come and go, and the lists seem to go out of date quickly. If this list ends up being inaccurate, go on Google and look for another one.  

https://www.gobankingrates.com/banking/9-banks-dont-use-chexsystems/

Do not pay for a list of non-chexsystems banks!  Even the paid lists have a reputation for being inaccurate.  

Here's a local Television Story on Chexsystems