- 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.
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All businesses reporting to the National Credit Bureaus, must meet the
minimum
reporting requirements established by each Credit Reporting Agency.
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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..
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Enter or update your accounts into the Metro 2 compliant software.
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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).
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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.
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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 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.
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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).
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Full reporting capability to handle all credit bureau approved reporting scenarios, which your company may encounter.
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Credit reporting software must accurately report consumer trade lines to the credit bureaus using the Metro 2 format.
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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.
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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.
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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.
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Easy and secure uploading of your accounts to the National Credit Bureaus.
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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.
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 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.
- 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:
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The Metro 2 format is designed to be easier to use and understand;
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Provides one standard computer format to be used for reporting accurate, complete and timely
consumer credit information;
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Meets all requirements of the Fair Credit Reporting Act (FCRA), the Fair Credit Billing Act (FCBA)
and the Equal Credit Opportunity Act (ECOA);
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Allows for reporting information at both the account and consumer levels;
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Allows reporting on debtors that "cannot be located";
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Allows reporting of deferred payments and "associate" borrowers /debtors information;
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Identification numbers can be changed to accommodate transfer or sale of debt (asset sales); and,
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The format accommodates a 4-digit "year" field to accommodate reporting in the year 2000 and beyond.
