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Credit reporting in times of crisis

Credit reporting can be challenging at the best of times but right now there’s more than usual to be concerned about.

Considerations for reporting:

  1. Are your credit policies, processes, and reporting capabilities up to the task when it comes to ensuring compliance during the crisis?
  2. Are you providing adequate education and information to your borrowers so they can understand your approach to dealing with difficulties and reporting the outcomes correctly?
    Good reputations can be won or lost during a crisis and ensuring customer satisfaction is paramount during trying times.

Of course, there are strong benefits to helping customers establish their credit, both for them and for the furnishers who provide the data. For instance:

  • Consumers with better scores get better loan rates and furnishers are better able manage their risk; a growing concern as the economy weakens.
  • Accurate reporting during this time of financial stress is important to the maintenance of your business reputation as well as to the wellbeing of your customers.

One thing is sure, whether you use a third party to submit data and whether you test data proactively or reactively, (or not at all) dealing with CRA rejects, data monitoring, and disputes can require significant time and resources in the best of times. Right now, in a crisis, accurate credit reporting is as important as ever.

Here are a few things to remember:

You are still responsible for FCRA compliance and data quality, even if you use a third-party processor to submit your data after it has been formatted. After your data has been submitted, you need to ensure your reports comply with the Fair Credit Reporting Act (FCRA).

Apart from reporting inaccuracies, many customer complaints relate to lack of responsiveness or timeliness. Consumers often find themselves short needing additional funds in a hurry. If a reporting error impacts their credit, they’ll want it fixed immediately. And as demand rises, the challenge of dealing investigating errors, fixing any issues and responding to customers’ disputes within regulated timelines could be significant. Particularly, if errors have occurred and the system of record needs to be updated. That must happen in a timely fashion too, otherwise you’ll be repeating the same errors the following month!

Monitoring your data every month doesn’t mean you are clear of data quality issues; it just means you become familiar with the inaccuracies, which will cost you. The result of not attending to them is, at a minimum, poor customer satisfaction. At worst, your organization can incur significant cost. The costs can include unnecessary time spent on remediation efforts and the risk that errors in the system of record will perpetuate other issues. Not to mention the potential for regulatory fines and bad PR when inadequate processes and policies are in place that negatively affect consumers.

What’s to be done?

By proactively validating your data and eliminating common errors, we can help you reduce frustration, risk, and cost, increase satisfaction, and give you your time back, even during a crisis.

Experian’s DataArc 360™ is designed to check the consumer credit information provided by data furnishers prior to submission to credit bureaus.

 

This allows data providers to take a proactive approach to ensuring the accuracy of information submitted to the bureaus, which will result in fewer errors and a more positive interaction between consumers and their credit. DataArc360™ allows you to:

  • Assess and correct your Metro 2® file prior to submitting to the credit bureaus. It’s bureau agnostic and can be used when sending data files to all CRAs.
  • Analyze and uncover data issues, find root cause, perform ad hoc investigations, monitor quality over time, and prioritize and justify actions. DataArc 360™ does this by automatically testing 115 common credit reporting issues, including adjusting for the nuances between the different credit agencies.
  • Rules can be easily added or modified by the business user to meet your own unique reporting conditions, COVID crisis policies, and product characteristics.
  • Perform data preparation, instantaneous data browsing, filtering, and relationship discovery.
  • Implement DataArc 360™ easily. You can be online within hours and it doesn’t require any SQL (or other) programming.

With a rules-based approach to data analysis, DataArc 360™ allows credit data furnishers to proactively manage their submissions, quickly profile and identify errors across their entire database—not just a data sample— to find missing or duplicated entries, and check for illogical conditions such as accounts in deferment reported as delinquent.

Beyond proactive data quality management, this powerful data reporting solution helps significantly with the post processing of reject reports and handling of disputes by easily “normalizing” rejects across different bureaus, allowing matching to Metro 2® files for analysis, and providing an efficient mechanism to manage the process going forward. When you have DataArc 360™, you will notice:

  • Saves IT time and effort.
  • Reduces cost of remediation (staff time).
  • Reduces customer dissatisfaction and potential loss of reputation.
  • Reduces the pain and improves the moral of your credit reporting and compliance staff.

With the right tools at your fingertips, you can feel good knowing your customers’ credit transactions are accurately reported and that your credit reporting isn’t the crisis it could itself become.

Ready to see how DataArc 360™ can help you improve your data reporting practices?

Learn more