Our approach to the development of a credit bureau is to harness the power of the data that is available in each market.
A Credit Bureau is an independent organization that compiles information from credit grantors and other (private and public) sources regarding individuals' credit applications and payment behavior.
The role of a Credit Bureau system is to:
Experian understands that a bureau system is not simply about hardware and software; it also requires deep knowledge and control of the procedures and mechanisms that will allow the operation of an efficient and performing credit bureau solution. Experian can provide great experience and expertise on topics such as security, business continuity, compliance, data management, data ownership, data sharing, consumer's rights, market and media relations, staffing and organization.
Our value offer:
There are several essential facets of Credit Bureau operations:
The potential of the Credit Bureau will directly depend on the quantity and quality of data shared between the subscribers.
Lenders should share non-performing loans alongside with those accounts with good payment history.
The sharing of positive data will enable the Bureau to develop more innovative and valuable services, including fraud prevention solutions intended to detect potential fraudsters at the time of application The sharing of positive data generally leads to higher acceptance rates and lower default rates; data shared across different market sectors will also increase the probability for the consumer to get further credit
Experian can help the borrowers, lenders and regulators to understand the rules and dynamics of a data sharing solution. The implementation of a credit bureau within a new market usually triggers the refusal of the credit institutions to share their data, particularly positive credit accounts. Experian can demonstrate how the sharing process is performed in full compliance with data protection and credit granting regulations. Our expertise and reputation can facilitate the understanding of the security rules and mechanisms that will be part of the bureau solution. We can clarify, for instance, that the majority of the credit acts will indicate that bureau data will only be used within a customer-initiated transaction, with explicit consent given by the applicant, thus removing the risk for "good" customers being poached by other lenders.
Data quality and the ability of lenders and the bureau to overcome this issue is one of the major challenges of bureau solutions in emerging markets. Experian expertise on data analysis and validation can facilitate the development and enforcement of data quality business rules and procedures. Our bureau solution can then be tailored around these rules.
Generally the Credit Bureau does not own the data contributed by the subscribers; data ownership is retained by the lenders with the Bureau purely managing the data sharing process. The responsibility for the data accuracy remains with the lender, for the bureau should not alter the information contributed by the users.
However, the local legislation may possibly move part of the data ownership from the lenders to the Credit Bureau. For instance in the US the Bureau does have some level of data ownership and therefore has responsibility for data accuracy and integrity.
Experian utilizes strict data control procedures and principles of reciprocity to protect the confidentiality and competitive position of credit grantors. This means that the integrity and security of the data is maintained, while allowing lenders to access only the same level of information they have contributed.
Credit bureau systems are expected to collect and manage highly sensitive data; specific security measures need to be in place to avoid unauthorized access to the bureau databases as well as ensuring that credit information is used in full compliancy with the bureau conduct code and the local data protection legislations. Experian bureau systems host a large number of security mechanisms to control and validate access rights. Sophisticated hardware and software solutions are deployed to enable the Bureau Operator to clearly fulfill international and local security requirements.
Releasing the Full Power of Bureau Data
The information sharing role of a credit bureau system helps creditors to assess risk and allocate credit more efficiently, which also means that borrowers do not need to rely on personal relations when trying to obtain credit. Credit lenders can then benefit from a range of bureau data-based solutions developed by Experian to support risk, fraud, customer monitoring and debit management processing.