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Who watches your credit?
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June 2, 1999: 8:45 a.m. ET
Agencies you've never heard of are keeping tabs on your spending habits
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NEW YORK (CNNfn) - Safeguarding private financial information from major credit reporting agencies has always been somewhat of a losing battle.
But in recent years, the fight has become even more challenging as a new crop of credit bureaus - targeted more specifically at consumers' vices -- have joined Big Brothers Experian, Trans Union and Equifax in the credit surveillance game.
While this group still plays a much smaller role than the three major credit bureaus, their proliferation has made life increasingly difficult for consumers with credit problems, says Jon Golinger, consumer program director of the California division of the Public Interest Research Group.
If your credit is marred through no fault of your own -- by errors or identity fraud, for example - not knowing who has this faulty information will make it more difficult to clear up any complications.
"You won't know you are on these lists (of the lesser known credit bureaus), until there is a problem," Golinger said. "In the meantime, you are still denied credit or a job, even though you have been cleared (by the larger agency.)"
Who's watching your finances?
These smaller agencies are distinct from the big three credit agencies in two primary ways. For one, the smaller bureaus generally only compile negative credit information. They'll keep track of what bills you don't pay, but unlike the Big Three, they won't give you credit for expenses you keep in check.
Smaller agencies also tend to be more specialized, targeting and compiling information aimed at potential clients' needs.
Tenant screening services, for instance, scan court records to collect information on eviction lawsuits. They combine that data with information obtained from the major credit bureaus and sell it to landlords wanting to screen prospective tenants. These reports sometimes include subjective information obtained from previous landlords about the behavior of a tenant.
While tenant screening companies serve an important function for property owners hoping to land reliable occupants, the reports -- if erroneous -- can have horrendous implications for some prospective tenants.
An identity theft victim, for example, may be listed with a tenant screening service as having defaulted on an unlawful detainer judgment and may not even know it.
The same holds true for check guarantee and verification companies, such as Tele-check, SCAN and ChexSystems. These services are used by merchants to determine a check's validity and by some banks to determine whether to open a new account for a customer.
Consumers rarely know about or monitor their records on these systems.
One of the latest types of agencies is a new debit credit bureau, which was formed jointly last year by check verification company Deluxe Corp., credit scoring company Fair, Isaacs and data mining company Acxiom.
The newly-formed bureau will combine data from full credit reports with demographics and other information "mined" from various computer sources. A computer-generated credit score will determine whether a store should accept an individual's debit card.
Most recently, telephone companies including AT&T, Sprint and MCI have linked up to start their own information clearinghouse, which "blacklists" consumers who don't pay their bills on time.
Other agencies have been known to monitor medical expenses, insurance and even worker's compensation claims.
How'd they know that?
Finding out what agencies have information on you is tricky -- if not impossible. The number of bureaus that have the potential to get information on you has soared amid technological advances that have made data processing cheaper and faster than ever.
The spread of personal information is also facilitated by so-called information brokers, who make it worth the major credit bureaus' while to sell data. These brokers buy data in bulk and then sell it in smaller, more affordable portions to other agencies.
Smaller agencies have also been empowered by information-sharing with their clients. If you bounce a check at Macy's, for example, the department store will share that fact with a monitoring service. That service, in turn, will warn Bloomingdale's when you try to write a check there.
Knowledge is power
While tracking down every single agency that has information on you is impractical -- if not hopeless, just being aware of the existence of these agencies can be useful.
If you have cleared your record with the three major agencies and are still being denied credit somewhere, your previously delinquent record has probably spread to other agencies.
That's because Experian, Trans Union and Equifax have the right to sell your credit report without your permission or knowledge. If you have had problems with your report, try to find out to whom the bigger agencies have sold your data.
Consumer group: regulation 'lacking'
Unfortunately, despite being subject to the same laws as its larger counterparts under the Fair Credit Reporting Act, at least one consumer advocate says regulation of smaller, more specialized agencies is lacking.
"It's basically a new industry and there is a lack of oversight," PIRG's Golinger said. "It's a wild, wild West and there's no one keeping (these smaller credit bureaus) honest."
While credit agencies are required to inform consumers of their rights, their track record is mixed and the burden is ultimately on consumers to ensure their reports are up-to-date and accurate, says Golinger.
Knowing your rights will make dealing with these agencies less arduous. Remember that any merchant that denies your credit is required to provide you with oral, electronic or written notice of all your credit report rights.
You have the right to contact any type of credit bureau to determine whether they maintain a file on you. Under certain circumstances, such as fraud or credit denial, you also are entitled to a free copy of your credit report. A prompt response to mistakes or inaccuracies is also your prerogative. 
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