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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The Metro 2 format is the standardized data format used by the credit reporting industry for furnishing consumer and commercial credit information to the National Credit Reporting Agencies. Developed in 1997 by the Consumer Data Industry Association (CDIA), it replaced the earlier "Metro" format introduced in the late 1970s.Detailed specifications for Metro 2 are outlined in the Metro 2 Credit Reporting Resource Guide, maintained by the CDIA.Key Features of the Metro 2 Format:
- Standardized Layout: Provides a uniform computer format for reporting complete, accurate, and timely consumer credit information.
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Regulatory Compliance: Meets the requirements of major consumer credit laws, including:
- Fair Credit Reporting Act (FCRA)
- Fair Credit Billing Act (FCBA)
- Equal Credit Opportunity Act (ECOA)
- Improved Usability: Designed to be easier to understand and implement compared to its predecessor.
- Detailed Data Reporting: Supports data at both the account and consumer levels.
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Flexible Debtor Reporting: Allows for the reporting of:
- Consumers who cannot be located
- Deferred payment arrangements
- Associate/co-borrower information
- Adaptability for Debt Sales: Accommodates changes in identification numbers when debts are transferred or sold.
- Future-Proof Design: Includes a 4-digit year field to support reporting beyond the year 2000.
The Metro 2 format has become the industry benchmark for credit data reporting, ensuring consistency, accuracy, and compliance across all reporting entities. - What Should a Business Look for in Metro 2 Credit Reporting Software?
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Bureau Approval and Compliance
- Ensure the software is fully tested, accepted, and approved by the National Credit Bureaus (Equifax, Experian, TransUnion, Innovis and Dun & Bradstreet) you plan to report to.
- The software must strictly adhere to the Metro 2 format specifications, as defined in the Metro 2 Credit Reporting Resource Guide provided by the Consumer Data Industry Association (CDIA).
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Robust Reporting Capabilities
- The software should support full Metro 2 reporting functionality, capable of handling all bureau-approved reporting scenarios relevant to your business.
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It must accurately report consumer trade lines in accordance with the Metro 2 format.
Note: Submitting accounts to the credit bureaus does not guarantee acceptance. If your software does not meet compliance standards, your data may be rejected. Repeated compliance errors can jeopardize your Data Furnishing Agreement.
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Accuracy and Reliability
- Choose software that prioritizes accuracy in data reporting.
- Consider the platform’s track record and how well it aligns with your specific reporting needs and account types.
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User-Friendly Interface
- Look for software that is easy to use, with intuitive navigation and clear help documentation.
- Help screens and guidance tools should minimize guesswork when completing data fields required by the credit bureaus.
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Secure and Efficient Data Transmission
- The software should offer secure data storage and support easy uploading of your account data to each credit bureau via SFTP or HTTPS.
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Scalability
- Ensure the software can handle your current and projected account volume. Some systems may have limitations on the number of accounts they can process effectively.
Final Tip: When evaluating credit reporting software or online services, consider scheduling a demo or requesting references from current users. The right software is not only compliant-it's a tool that helps your business report accurately, stay in good standing with the bureaus, and streamline your monthly reporting process.
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Bureau Approval and Compliance
- Does a Business Need a Contract to Report Credit to a Credit Bureau?
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Yes. In order to report trade lines to the National Credit Reporting Agencies—Equifax, Experian, Innovis, TransUnion and Dun & Bradstreet—a business must have a Data Furnisher's or Service Agreement in place. This requirement applies whether you report directly to the bureaus or use a third-party processing service.
Note: This agreement is separate from any contracts related to pulling credit reports.
To begin the process, you must contact each credit bureau you intend to report to and request their Data Furnisher or Service Agreement. - When Reporting Trade Lines to One Credit Bureau, Will They Appear on Others?
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No. Each Credit Reporting Agency (CRA) operates independently and maintains its own database. Trade lines will only appear on the credit bureau(s) to which you directly submit data and have an active reporting agreement. If you do not report to a particular bureau, your trade lines will not be reflected in that bureau’s reports.
- How Long Does It Take the Credit Repositories to Update Accounts After Submission?
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Once a credit repository receives your initial batch of account data, it undergoes a thorough verification process. This may include requesting additional information from your business or requiring manual confirmation of submitted data.Due to the time involved in this initial review, your first batch of accounts may take several weeks to appear in the credit bureau’s system. After your data has been verified and approved, updates are typically processed within 30 days of submission.Note: Processing times and policies may vary by bureau. It’s recommended to contact your bureau representative for specific timelines and requirements.
- 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 its own policy regarding minimum reporting requirements. Generally, you are expected to report your entire portfolio, including accounts aged up to 6.5 years. However, if your account volume still falls below the required threshold, you may have the option to report through a third-party processor or stacking service.To pursue this option, you will need:
- Metro 2–compliant software, following the specifications outlined in the Metro 2 Credit Reporting Resource Guide
- An active Data Furnisher's Agreement with one or more of the following bureaus: Equifax, Experian, TransUnion, Innovis
- Approval from the bureau(s) to use a third-party processor or stacking service to submit trade lines on your behalf
We recommend contacting the credit bureaus directly to discuss your eligibility and explore approved third-party reporting solutions. - What Is Third-Party Processing (Stacking)?
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If your company does not meet the minimum account requirements set by the credit bureaus, you may be able to report your trade lines through a third-party processor or stacking service. In this arrangement, your accounts are submitted to a processor, who then combines (or "stacks") them with accounts from other businesses.Requirements for Using a Third-Party Processor:
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Bureau Approval:
The credit bureau must allow your company to report via a third-party processor. Approval is bureau-specific and may depend on your industry, account volume, or other criteria. -
Data Furnisher Agreement:
Your company must have an active Data Furnisher’s or Service Agreement with each bureau you intend to report to—even if you're using a processor. -
Metro 2–Compliant Software:
You must use bureau-approved credit reporting software that complies with the Metro 2 Credit Reporting Resource Guide. -
Adherence to Bureau Guidelines:
Your company must follow all reporting policies outlined in the bureau's Data Furnisher Agreement. -
Timely Monthly Submissions:
Your accounts must be sent to the third-party processor on a timely, monthly basis to ensure consistent reporting.
Important Note:
Reporting through a third-party processor does not guarantee that your accounts will be accepted by the credit bureaus. If your data is incomplete, inaccurate, or non-compliant, individual trade lines—or even the entire file—may be rejected.
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Bureau Approval:
- What to Look for in a Third-Party Processor (Stacking Service)
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A third-party processor, also known as a stacking service, is responsible for combining ("stacking") your accounts with those of other businesses and submitting the consolidated file to the credit bureaus on your behalf. When selecting a processor, it’s important to ensure they meet the following criteria:Key Qualities of a Reliable Third-Party Processor:
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Bureau Approval
The processor must be authorized to report your accounts to the specific National Credit Bureaus ( Equifax, Experian, TransUnion, Innovis ) with which you have Data Furnisher Agreements. -
Compliance Checks
The processor should perform thorough, up-to-date compliance validation on all submitted accounts to ensure alignment with the Metro 2 Credit Reporting Resource Guide -
Secure and Timely Transmission
They must transmit your accounts to the credit bureaus securely, on a regular monthly schedule, using secure methods such as SFTP or HTTPS. -
Flexible File Handling
The processor should be capable of receiving your data via secure electronic transmission.
Important Reminder: Using a third-party processor does not guarantee that your accounts will be accepted by the credit bureaus. If submitted data is incomplete, inaccurate, or non-compliant, individual accounts—or even the entire file—may be rejected.
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Bureau Approval
- We Provided a Personal Loan to Another Consumer—Can We Report Their Payment History to the Credit Bureaus?
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Generally, no. The major credit bureaus—Equifax, Experian, Innovis, and TransUnion—require that entities reporting consumer credit be legitimate, registered businesses with an approved Data Furnisher Agreement.
They do not allow individual consumers to report trade lines on behalf of another consumer, even if the reporting is done through a third-party processor or stacking service.
If you are not operating as a formal business entity that meets bureau requirements, you will not be permitted to furnish data to the credit reporting agencies. - What Are the Benefits of Reporting Credit?
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Reporting credit account information to the major credit bureaus offers several advantages for both your business and your customers:
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Helps Customers Build or Establish Credit
Reporting on-time payments gives customers an opportunity to build or improve their credit history, which can positively impact their access to future credit and financial services. -
Encourages Responsible Borrowing
Knowing their payment history is being reported, customers are more likely to manage their accounts responsibly, helping reduce delinquencies and defaults. -
Improves Market Performance
Consistent credit reporting enhances transparency in the credit ecosystem. It supports more informed lending decisions across the industry, which in turn can lower credit risk and reduce the overall cost of lending. -
Prevents Over extension of Credit
By sharing payment data, you help other lenders assess a borrower's full credit exposure—reducing the chances of over-lending and helping ensure your customers are better positioned to meet their obligations. -
Increases On-Time Payments
Customers who are aware that their payment history is being reported are more motivated to pay on time, improving overall portfolio performance. -
Supports Collection Efforts
For delinquent accounts, credit reporting gives collection agencies additional leverage by making the debt visible on the consumer's credit report, often encouraging faster resolution.
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Helps Customers Build or Establish Credit