Tag: data reporting

Performance reports are foundational and are one of the key elements of a sound and prudent risk management framework. Learn how effective reports evolve.

Credit reporting companies and data furnishers have been put in the spotlight to provide consumers with assistance that they need during COVID-19.

Experian experts provided insight on how data furnishers can help support small businesses amidst the pandemic while complying with recent regulations.

Learn how to accurately and consistently report on consumers' credit while complying with regulatory guidance during the COVID-19 pandemic.

Mandatory updates to data reporting and collections procedures have been announced and implemented. Have you made the required changes?

Most businesses are familiar with credit bureaus today, but myths still exist around reporting credit data. Let's examine the top three and bust them.

For lenders, credit bureau data is vitally important in making informed risk determinations for consumer and small business loans. And the backbone of this data is credit reporting. With the rise of online marketplace lenders, there is a renewed focus on reporting credit data, particularly in light of the rapid growth of this sector. According to Morgan Stanley research, online marketplace loan volumes in the U.S. have doubled every year since 2010, reaching $12 billion in 2014. It is predicted this growth will nearly double by 2020. As more consumers and small businesses flock to online marketplace lenders, these lenders have a growing responsibility to be good stewards of the credit ecosystem, doing their part to support the value of information available for the entire industry – and for their own benefit. After all, failure to report credit data could have an adverse impact on the financial landscape, affecting consumers, small businesses and online lenders themselves. While there are already several online lenders currently reporting credit data, there is still a significant number of the marketplace that do not. So why specifically should marketplace lenders report? 1. Stay One Step Ahead of Regulators. It’s true data reporting is currently voluntary for marketplace lenders. But the Consumer Financial Protection Bureau’s (CFPB) recent activities reflect a growing focus by regulators to advocate for and protect consumers. Voluntary data reporting reflects the spirit of transparency and aligns with many regulatory priorities. By taking proactive steps and reporting data on their own, online lenders can stay one step ahead of regulators, hopefully alleviating the need for new regulations. 2. Gain a Competitive Advantage in the Long Run. Sure, data reporting is about “doing the right thing” for consumers, but it can be good for business too. Online marketplace lenders can gain distinct advantages by reporting. For example, with access to more accurate consumer information, lenders are able to develop and offer more competitive products tailored to the unique needs of their customers. By expanding their offerings, online lenders can differentiate themselves and thereby grow market share. Reporting also enables lenders to emphasize their commitment to consumers as part of their value proposition, demonstrating how they are helping to grow customer credit. Reporting rewards customers with good payment history, allowing them to take advantage of better loan rates and lower fees available to those with exemplary credit scores. This in turn can lead to higher customer satisfaction, loyalty and return business. With access to more complete and comprehensive consumer credit data, online lenders gain a clearer picture of a consumer’s credit worthiness, enabling them to make more informed, and less risky, lending decisions. Reporting also encourages on-time payments. When customers know that lenders report, they are more likely to pay on-time and less likely to default on their debt. 3. Have You Heard of the “Millennials?”  Millennials, and their passion for all things Internet-enabled, are the perfect match for online marketplace lenders. In fact, the latest research from Experian reveals 47 percent of millennials expect to use alternative finance sources in the near future. And 57 percent reported they are willing to use alternative companies and services that innovate to meet their needs. Millennials are clearly more open to nontraditional banking, but at the same time have a greater expectation of transparency, making it all the more important for online marketplace lenders to report credit data. 4. Achieve Data Quality. Complying with Fair Credit Reporting Act (FCRA) data furnishing requirements might seem daunting for marketplace lenders, but there are tools and solutions available to help lenders proactively assess the accuracy of credit data and help identify systemic issues. Marketplace lenders can measure and monitor quality and completeness, dispute metrics, as well as industry and peer-benchmarking data. 5. Qualify More Consumers. With reporting, marketplace lenders can gain access to an invaluable wealth of information that goes well beyond the traditional credit score. Armed with robust analytics, online lenders are in a position to qualify more consumers and small businesses, which creates a significant opportunity to gain long-term customers by improving the overall customer experience. --- Reporting really is a win for marketplace lenders and consumers. In the end, it will contribute to a healthy credit ecosystem and ensure lending decisions are based on the highest quality of information available. For more information about data reporting, including how to start, visit www.experian.com/datareporting. Learn more about data reporting, or about our Online Marketplace Lending track, at Experian's annual Vision Conference in May.

Accuracy matters. It matters in dart throwing, math calculations, and now more than ever, in data reporting. The Consumer Financial Protection Bureau (CFPB) issued a bulletin on Feb. 3 warning banks and credit unions that if they fail to meet accuracy obligations when reporting negative account histories to credit reporting companies, the result could be bureau action. As noted in the Fair Credit Reporting Act (FCRA) section 623, data furnishers have an obligation to ensure the accuracy of the information furnished to a Credit Reporting Agency (CRA). Violation of these rules presents a variety of risks, and the regulatory agencies have enforced harsh consequences. Avoiding penalties is certainly a strong incentive for data furnishers to implement a formal compliance management system and data quality program. But there are additional benefits to ensuring accuracy – most notably keeping customers happy and loyal, and maintaining a reputable brand in the marketplace. Today’s consumers increasingly understand the impact of credit scoring and data reporting, and recognize a poor credit score can impact their lives in major ways. Credit is tied to so many milestone financial moments. Securing mortgage loans, auto loans, obtaining low-interest rate interest credit cards and securing private student loans can all be derailed with an unfavorable and inaccurate credit report. Not to mention credit reports can influence one’s eligibility for rental housing, setting premiums for auto and homeowners insurance in some states, or determining whether to hire an applicant for a job. To properly serve customers who simply expect a fair and accurate representation of their financial history, data furnishers must be able to guarantee the credibility of their reported data. Those organizations that cannot ensure accuracy put their reputation at risk and may lose a customer’s trust and business. “Consumers should not be sidelined out of the basic banking services they need because of the flaws and limitations in a murky system,” Cordray said in the bulletin. “People deserve to have more options for access to lower-risk deposit accounts that can better fit their needs.” The CFPB has handled more than 105,000 credit-reporting complaints in its short history, making credit reporting the third most-complained-about consumer issue. By far the most common types of credit-reporting issues identified by consumers is incorrect information on credit report (77 percent).* Certainly these mistakes are not made intentionally. But speak to a consumer battling an inaccuracy, especially someone in the midst of applying for credit for a specific need, and frustrations can soar quickly. All lenders are advised to maintain a full 360-degree view of data reporting, from raw data submissions to the consumer credit profile. Better data input equals fewer inaccuracies. Additionally, there are comprehensive reporting solutions available to assess the accuracy of consumer credit data. The regulatory environment will without a doubt continue to be a hot topic in the media, fueled by announcements such as these by the CFPB, so lenders should take note and identify processes to ensure complete and utter accuracy. It matters in so many ways, so it’s best to make data reporting a priority now, if it’s not already. Source: CFPB August 2015 Monthly Complaint Report