Do creditors use credit reports to find you?

The short answer is yes. The better answer is…

This is often called locate or skip locate.  Both creditors’ collection departments and collection agencies review credit reports to obtain information to assist in debt collection.  They use credit reports to try to locate the debtor and/ or determine their ability to pay.  They look at the last known address, phone number, current payment information and recent updates on the credit report.   This also lets them know whether the debtor owes money to other companies.

If the collectors are unable to contact the debtor, they can use services offered by three credit reporting agencies, Equifax, Experian and TransUnion, that alerts them when there are updates to the credit report.  Examples of alerts are personal information, credit information and credit inquiries.  The company can select what information triggers the alerts.

Personal information

When the debtor can’t be located by phone and the address is incorrect, the collection department or collectors set up alerts with the credit reporting agencies to be notified when there is a change to name, phone number, or current address.

For example, if the debtor’s addresses changes, the collector will be alerted with the new address information.  Now the collector has new information to use to contact the debtor.

When you move and change your address with your creditors, your address is also updated on your credit report.  Some consumers move and don’t update their address with creditors to avoid being found by collectors.

Credit information

Another alert is a change in credit information, such as a new account was opened or a payment was made.  Opening a new account indicates that the debtor was able to obtain credit.  Recent payments imply that they have money to pay their bills. This alerts the collector to contact them, because they now may be able to pay.

On the other hand, accounts that have just changed to past due 120 days or more or turned over to collections, indicates that the debtor may be unable to pay.  The collector may decide not to contact them, because they don’t have the money. Instead, collection efforts are concentrated on other debtors.

Credit inquiries

If the debtor is seeking new credit, this can be an indicator that the individual needs additional credit, which is considered negative. On the other hand, if they are approved for the card or loan, the collector could interpret this as a sign that their credit is improving and can pay their debt.

The Fair Credit Reporting Act, permits collection agencies and collection departments to review your credit report.  It is just one of the tools they use to help in collecting debt.  You should not avoid paying your obligations, but you don’t have to be harassed by creditors.

Credit Damage Expert, John Ulzheimer, is the President of Consumer Education at, the credit blogger for, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.