You’ve heard the term “consumer report.” Many times, I’m sure. But do you really know what one is? If you’re nodding your head, would you be able to explain it to a Martian? If not, then you probably do not have a solid understanding of what one is.

But lenders, landlords, creditors, employers and insurers certainly know what a consumer report is, because every time they’re about to deal with a new client, they put themselves at risk.

• Is he in good health?
• Will she stop paying her mortgage?
• Will he total his car?
• Will she be productive on the job?
• And more questions abound.

An article on privacyrights.org explains that all sorts of businesses need to assess the risk of every new client. However, it would be quite unwieldy for businesses to sit every potential client down and run through a list of 100 questions, then wonder if the applicant is being truthful.

Enter the consumer report.

• Credit report: Lenders can see the applicant’s financial status and bill payment habits.
• Fair Credit Reporting Act: Encompasses entire financial status.
• Miscellaneous companies are targeting consumer reports specifically for landlords, insurers and employers.

The article explains that the businesses that put together these targeted reports are called consumer reporting agencies. Consumer reports don’t just deal with finances and credit. Other types of reports come from nationwide specialty consumer reporting agencies. These other kinds of reports may detail one’s medical history, employment history, history of insurance claims and check writing history.

You are entitled to a free report every 12 months from a nationwide specialty consumer reporting agency.

• Make your request to each specialty reporting agency; they act independently of each other.
• Every agency has a toll-free number.
• Some agencies allow faxed, mail-in or online requests. For online requests, the agency’s site must provide a FAQ or help page.
• You are entitled to an update on your request’s status.
• There is no deadline for the agency to honor your request.
• The agencies gather information on people from a number of sources such as bankruptcy filings, driving records, credit history, public records of court cases and insurance companies.

Robert Siciliano is an identity theft expert to BestIDTheftCompanys.com discussing identity theft prevention