Third Party Processor/Stacking Services
for the Metro 2 format
- What is 3rd party processing/stacking?
If your company does not meet the credit bureaus minimum number of account requirements, a 3rd party processor/stacking service must be used to report your trade lines to the bureaus. The company would send their accounts to the processor, the processor would then combine the accounts with their other customers accounts to meet the credit reporting agencies (CRA) minimum reporting requirement.
The following five requirements must be met for using a 3rd party processor:
- The bureau which you will be reporting with, must allow your company to report less than their minimum number of account requirements, through a third party processor/stacking service. Each credit bureau has their own policies and may or may not allow processor reporting for your industry.
- Your company is required to have a data furnishers/service agreement with each credit bureau to which you will be reporting.
- Your company must use a bureau approved, Metro 2 Credit Reporting Software application.
- Your company must adhere to the reporting guidelines set fourth in the bureaus data furnishers/service agreement.
- The 3rd party processor must receive your accounts on a timely, monthly basis.
Please note: Reporting directly to the credit bureaus or through a 3rd party processor does not guarantee the credit reporting agencies will accept your accounts. If the accounts have missing or incorrect data, and/or contain compliance errors, chances are, the bureaus will bypass that account. If your file contains excessive errors, the entire file may be bypassed.
- What to look for in a 3rd party processor?
A third party processor/stacking service is used for combing, "stacking accounts" and forwarding the "stacked" accounts to the credit bureaus. The third party processor should provide the following services.
- Must be approved to report your accounts to the National Credit Bureaus which you have specified.
- Complete, up-to-date FCRA/ECOA/FCBA/FDCPA compliance checking on all submitted accounts.
- Timely, scheduled, secure, forwarding of accounts to the credit bureaus.
- Must receive secure, electronic transmission, or be able to read the type of media (disk, tape) which you are submitting.
- Accounts should be securely archived by the processor for re-submission (if necessary).
Please note: Reporting directly to the credit bureaus or through a third party processor/stacking service does not guarantee the credit reporting agencies will accept your accounts. If the accounts have missing or incorrect data, and/or contain compliance errors, chances are, the bureaus will bypass that account. If your file contains excessive errors, the entire file may be bypassed.
- We do not meet the minimum number of accounts to report to the credit bureaus. What are our options?
Each Credit Bureau has their own policy on reporting minimums. Basically, you should report your entire portfolio with accounts aging up to 6.5 years. If you are still unable to meet their minimums, the Credit Bureaus may allow you to report through a third party processor or stacking service. You will need Metro 2 compliant software, a data furnisher's agreement with Equifax, Experian, Innovis or TransUnion and have approval from the bureaus to use a third party processor/stacking service to submit trade lines on your behalf.
- National Credit Bureau Contacts, Reporting Minimums & Requirements
The National Credit Repositories (Equifax, Experian, Innovis and TransUnion) require a Data Furnisher's or Service Agreement for reporting accounts. This is a separate agreement from pulling credit reports. Please contact each National Credit Bureau to obtain this agreement.
The National Credit Repositories also require a minimum number of active accounts and monthly reporting. This applies to direct reporting or processor reporting, see example. The software which you use to report trade lines must adhere to the strict Metro 2 format standards as described in the Metro 2 Credit Reporting Resource Guide, distributed by Consumer Data Industry Association (CDIA). We have provided phone numbers and account minimums for each credit repository for your convenience.
Equifax General Requirements: Minimum 500 accounts for all industries with the exception of Credit Unions and Banks which have a 100 account minimum. State laws requiring Mortgage Company reporting, can report less than 500 accounts through a third party processor.
Experian General Requirements: Each request is reviewed individually and Experian determines eligibility based on their independent merit.
TransUnion General Requirements: Minimum 100 accounts.
Innovis General Requirements: Less than 5000 accounts must be reported through a processor.
Notice: The above minimum number of accounts may vary. Please contact each repository you wish to report with and verify how many accounts they will accept for direct reporting or reporting through a processor. Each credit repository has their own policies for the minimum number of accounts to report. These policies may vary between regions and the type of business.
Minimum reporting example:
The bureaus ask that you report your entire portfolio each month, therefore by reporting the minimum number of accounts required the first month, subsequent months will automatically meet that minimum.
In this example, the reporting bureau requires 500 accounts:
First Months Reporting 500 accounts (report your entire portfolio up to 6.5 years old) Second Month Reporting 500 accounts (from the first month) + 50 new accounts totaling 550 accounts Third Month Reporting 550 accounts + 35 new accounts totaling 585 accounts Note: It is not required to have 500 new accounts each month.
For Collection Agencies, report your entire portfolio the first month. Subsequent months, report your entire portfolio or optionally, report only new accounts and updates.
- We provided a personal loan to another consumer and want to report their payment history to the credit bureaus?
The credit bureaus (Equifax, Experian, Innovis, and TransUnion) require that you must be a legitmate business to report consumer credit. They typically will not allow the reporting of consumer tradelines from another consumer even if reporting through a third party processor or stacking service.