Things to Consider in Your Evaluation of a Credit Reporting Solution.
Obtaining a credit report is often the first 3rd party service a consumer will experience when working with an originator. For instance, the courtesy, experience and expediency of the CRA representative (Credit Reporting Agency) conducting the update or supplement is very important, especially if the consumer is needed on the line to complete the update with the creditor.
A credit reporting solution contains a vast array of moving parts, and is a sum of all the data integrations and service features contained within – it’s more than just the credit report.
This is certainly not an exhaustive list of considerations, but a few important ones you may wish to discuss with your current or prospective CRA.
- Your CRA should have a solid, easy to navigate User Interface for credit reporting with the LOS (Loan Origination System, i.e. Ellie Mae, Calyx Point) your firm has chosen to use.
- The credit report should prominently display conditions on the first page that could halt or inhibit the origination from moving forward.
- FICO Score(s)
- Collection/past due accounts
- Fraud/OFAC, etc.
- If your firm is not using a decisioning system, such as D+H’s MortgagebotPOSTM where data from the credit report is run through a rule set for a pass/fail analysis, then your CRA should provide you with an option to establish rule sets with results available on the credit report.
- CRA representatives conducting tradeline updates/supplements potentially with a borrower on the telephone line should be very professional, experienced and verbally easy to understand.
- If your firm works with wholesale lenders, is your CRA’s credit report accepted by the wholesale lender(s) your firm utilizes and is there a system to system interface in place between the firms?
- Tradeline Merge Logic
- Not often discussed, but each CRA will use one or offer several different tradeline merge logics to choose from. Each logic has its pros/cons that the CRA can discuss with you.
- “Merge & Purge” or “Survivor”
- “List & Stack” or “Pick & Choose”
- How easy is it to access help for problem files?
- A CRA representative should be easy to reach, and able to access details of a file from their workstation.
- How many options/customizations are built into the credit reporting solution that can easily be activated?
- You may wish to minimize the amount of change your departments will encounter when changing from one CRA to another. Can the new vendor match categorization, color codes, analytics etc. that were used by your previous CRA to minimize training and new procedure documentation?
- How easy is it to have needed customizations built and implemented?
- Does the CRA own the system they use to merge the repository files? Do they own the order/deliver platform, i.e. can a decision easily be made in house to move forward with development?
- Are your investors, regulators and other business relationships satisfied with the security, IT infrastructure and software development of your current CRA?