Questions and Answers
- How does a business report credit?
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- Contact each National Credit Reporting Agency ( Equifax, Experian, TransUnion, Innovis) which you will be reporting with, and establish a Data Furnishers or Service Agreement. This is a separate agreement from pulling credit reports.
- All businesses reporting to the National Credit Bureaus, must meet the minimum reporting requirements established by each Credit Reporting Agency.
- Once you have established a Data Furnishers or Service Agreement with one or more of the National Credit Bureau repositories and meet their account reporting minimums, then you are ready to research and purchase Metro 2 credit reporting software which will accurately report your consumers accounts using the Metro 2 format..
- Enter or update your accounts into the Metro 2 compliant software.
- The software should perform validity checks on the accounts, to ensure the information which you have entered, is compliant with the latest regulations set forth in the Metro 2 Credit Reporting Resource Guide, Fair Credit Reporting Act (FCRA), the Fair Credit Billing Act (FCBA) the Equal Credit Opportunity Act (ECOA) and the Fair Debt Collections Practice Act (FDCPA).
- Send your accounts to the National Credit Repositories which you have a reporting agreement with. Once the Credit Repository has received your accounts, they will run extensive processes to verify the data which you have submitted. They may also request additional information from your company and may have you manually verify the data which was submitted. Because of the time involved in this initial verification process, the first batch of accounts may not be updated for several weeks. Once the bureaus have approved your accounts, they will typically update the accounts within a thirty day period. This process and time delay will vary between bureaus. Please contact your sales representative at the bureau for their policies.
- Repeat steps 4-6 on a monthly basis. Please note: Monthly reporting is required by all credit reporting agencies. Customers which do not report on a monthly basis, risk termination of their reporting agreement and accounts purged from their databases.
- What is the Metro 2 format?
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In 1997, the credit reporting industry initiated the use of the "Metro 2" format which became the industry standard for reporting debtor information.The "Metro2" format was developed by Consumer Data Industry Association (CDIA) to replace the Metro format which was developed in the late 1970's. The Metro 2 format layout is described in the Metro 2 Credit Reporting Resource Guide.The Metro2 format facilitates complete and greater accuracy of reporting of data and provides the following features:
- The Metro 2 format is designed to be easier to use and understand;
- Provides one standard computer format to be used for reporting accurate, complete and timely consumer credit information;
- Meets all requirements of the Fair Credit Reporting Act (FCRA), the Fair Credit Billing Act (FCBA) and the Equal Credit Opportunity Act (ECOA);
- Allows for reporting information at both the account and consumer levels;
- Allows reporting on debtors that "cannot be located";
- Allows reporting of deferred payments and "associate" borrowers /debtors information;
- Identification numbers can be changed to accommodate transfer or sale of debt (asset sales); and,
- The format accommodates a 4-digit "year" field to accommodate reporting in the year 2000 and beyond.
- What should a business look for in Metro 2 credit reporting software?
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- The software should be fully tested, accepted and approved by the National Credit Bureaus to which you will be reporting.
- Credit reporting software or on-line reporting services must be kept up-to-date with the Metro 2 format specifications based on the Metro 2 Credit Reporting Resource Guide provided by Consumer Data Industry Association (CDIA). Additional references can be found in The Fair Credit Reporting Act (FCRA), The Fair Credit Billing Act (FCBA), The Equal Credit Opportunity Act (ECOA) and The Fair Debt Collections Practice Act (FDCPA).
- Full reporting capability to handle all credit bureau approved reporting scenarios, which your company may encounter.
- Credit reporting software must accurately report consumer trade lines to the credit bureaus using the Metro 2 format.
- Please note: Simply submitting an account to the National Credit Reporting Repositories, does not guarantee acceptance into their database. If the software or on-line reporting services which you are using does not conform to the list above, chances are, the credit bureaus will exclude the non-compliant accounts. If excessive compliance errors are reported month after month, your reporting agreement with the bureaus, may also be compromised.
- Purchasing a credit reporting software package should be based on the accuracy in which it reports your accounts, and the features which best suit your companies needs.
- Software should be easy to use and provide intuitive Help Screens. This will help eliminate any second-guessing as to what the credit bureaus may require in a particular field.
- Easy and secure uploading of your accounts to the National Credit Bureaus.
- Software can be limited to the number of accounts which it will reasonably handle. Make sure the software which you are selecting can handle the volume of accounts which your company has to report.
- Does a business need a contract to report credit to a credit bureau?
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Yes. The National Credit Repositories, Equifax, Experian, Innovis and TransUnion require a Data Furnisher's or Service Agreement for reporting trade lines whether you report directly to the bureaus or through a third-party processing service. This is a separate agreement from pulling credit reports. Please contact each Credit Bureau to which you will be reporting and obtain this agreement.
- What are the Credit Bureau Contacts, Reporting Minimums & Requirements
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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 requires all industries to report a minimum 500 accounts in the U.S.A. or 200 in Canada. With approval from Equifax, banks, credit unions, licensed mortgage lenders, and members of the NABD/NIADA/BHPH and their related consortium's are able to report less than 500 accounts through a processing service.Equifax (United States)
888-202-4025
Equifax (Canada)
800-278-0278
Each request is reviewed individually and Experian determines eligibility based on their independent merit.Experian
866-831-5614
TransUnion General Requirements: Minimum 100 accounts.TransUnion (United States)
866-922-2100
TransUnion (Canada)
800-565-2280
Innovis General Requirements: Less than 5000 accounts must be reported through a processor.Innovis
614-538-2123
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. - When reporting trade lines to one credit bureau, will the trade lines show with the other credit bureaus?
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No. The credit reporting agencies (CRA) are separate entities and maintain their own databases, therefore your trade lines will only be displayed on the bureaus which you submit data and have a reporting agreement with.
- How long does it take the Credit Repositories to update accounts after submission?
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Once the Credit Repository has received your first batch of accounts, they will run extensive processes to verify the data which you have submitted. They may also request additional information from your company and may have you manually verify the data which was submitted.Because of the time involved in this initial verification process, the first batch of accounts may not be updated for several weeks. Once the bureaus have approved your accounts, they will typically update the accounts within a thirty day period.This process and time delay will vary between bureaus. Please contact your sales representative at the bureau for their policies.
- We do not meet the minimum number of accounts to report to the credit bureaus. What are our options?
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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 software which complies with the Metro 2 Credit Reporting Resource Guide, 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.
- What is 3rd party processing/stacking?
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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 which adheres to the Credit Reporting Resource Guide.
- 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?
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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 provided a personal loan to another consumer and want to report their payment history to the credit bureaus?
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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.
- What are the benefits of reporting credit?
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- Promoting on-time payments can provide your customers with an opportunity to build or establish credit.
- Reinforces borrower incentives to manage credit wisely and avoid delinquencies and defaults. Reporting credit improves the performance of the entire market and lowers the costs of making credit available.
- Better information results in better lending. Sharing payment information provides other creditors the information they need to avoid overextending your customers. As a result, your customers will be in a better position to pay their loan on time.
- Customers who know you are reporting payment history are more likely to make on-time payments.
- Allows a collection agency better leverage to collect a debt.