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In the fine print of many loan applications, lease agreements, and other financial documents there is often a much-overlooked "credit check" clause. This clause stipulates that the lender, landlord or financial institution be allowed to check the other party's credit history. Many individuals do not fully understand what a credit check is or why one is required in such agreements.

Credit history can be a very important factor for things like allowing someone to rent an apartment or loaning money for a business, and credit checks are the method by which this information is obtained about a person's credit and payment history. You would want to feel secure that someone would likely pay you back, wouldn't you?

Credit checks contain important personal information so many people are worried about who has access to their credit information. Luckily the Fair Credit Reporting Act clearly defines the rules regarding credit checks. Creditors and insurers will be able to access your credit data as will any other business that is providing you with a line of credit.

Your employer does not have the right to look at your credit history unless you give them specific written permission. Accessing someone's credit history, even that of an employee, is against the law. If you find that someone has looked at your credit history without permission, the law allows you to take them to court.

Now finally people may wonder if they can access their own credit history or perform credit checks on themselves. They can, under the Fair Credit Reporting Act a person can request their credit information three times each year, once from each different credit reporting company.

It can take up to fifteen for you to receive your credit history but once it arrives you will be able to see what kind of information is used to evaluate your financial status. One of the more important things in your credit history is your credit report scores. These are the numeric representation of you entire credit history. Many loan applications ask for you to provide a credit report with score in order to better quantify level of risk as an investment. By knowing this score ahead of time you can gain a leg up in loan applications.

Once you understand the detail of your credit history it is easy to see why so many financial organizations what to review it before doing business with you and by knowing who can and can not access your most private finical data you can better protect yourself and your credit history form those who would use it for nefarious means.

Most contracts contain a clause allowing the other to perform credit checks on the signer. Even if people see the clause they often don't know what it means. Any company loaning money to someone needs to obtain a credit report with score on that person in order to determine whether or not he or she is a good credit risk. They need to know how much debt a person has, whether they can afford to make even more payments, and whether they usually make their payments on time. Credit report scores can tell them this. The Fair Credit Reporting Act also lets individuals see their own credit reports and score.