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Credit Check


The credit check technique is used to check a consumer’s identity by comparing information the consumer provided to what is stored on their credit report. Key considerations when implementing or buying this functionality include:

  • Most consumers are not going to want to give a merchant their SSN and credit card number.

  • Can you get data without a SSN?

  • Can it support data on international orders?

  • What data elements do they require from a merchant?

  • Can they tell you about recent changes to the data?

  • Don’t ever store credit card and SSN information together unless proper security precautions have been put in place. If a merchant gets hacked and this information is compromised, it is going to hurt.


As merchants are processing an order they will collect the required data elements from the consumer and will pass them to the credit bureau. Typically this information is sent through a real-time feed that hooks into their existing order processing or CRM application. Typically the credit bureaus will have different levels of service as to what type of information they will return back to a merchant. They could have verification-only checks, fraud score checks and true credit scores. Make sure the information provided by the service will meet the requirements for using them. Accessing a consumer’s credit history is a big deal, so make sure to get legal guidance about what information is being accessed and if there is any new reporting or notification requirements that will have to be put into place.


The feed a merchant gets back from the credit bureau may come in one of two forms. The first one is where they simply provide the information on the consumer. For example, the merchant provided a name and a SSN and the credit bureau provided the merchant with an address, phone number and credit card number.

Or a merchant will provide them with the name, SSN, address, phone and credit card and they pass back a pass/fail indicator for each data element. Depending on how their choice of credit bureau works, the merchant will have to code their systems to interpret these results. The merchant will have to determine the criteria for accepting or rejecting an order.


Credit Checks can be used as a source to check a consumer's identity by comparing the information provided to what is on the consumers credit report.

This is an effective way to verify data a consumer is providing a merchant. In general, the credit report can validate the phone number, address, name and credit card information provided. Merchants can also use it to verify age.

Keep in mind that this data can be manipulated by a fraudster in cases of true identity theft. These reports rely on input from agencies, banks and merchants and their data may not be completely up to date, and typically they require the social security number (SSN), or the last four digits of it, to be provided. Credit checks can be expensive to use for authentication and depending on the data a merchant accesses they may have further legal notification requirements in accordance with the Fair Credit Reporting Act.



Alternative Solutions - Links

Building this In-House - N/A

Estimated Cost - Moderate, typically a per-transaction fee

Sample Vendors - TransUnion, Experian, Equifax, FICO

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