December 13, 2012
Key Dimensions and Processes in the U.S. Credit Reporting System
"This paper describes the credit reporting infrastructure at the three largest nationwide consumer reporting agencies (NCRAs) – Equifax Information Services LLC (Equifax), TransUnion LLC (TransUnion), and Experian Information Solutions Inc. (Experian) – with a special focus on the infrastructure and processes currently used by the NCRAs to collect, compile, and report information about consumers in the form of credit reports. Credit reports play an increasingly important role in the lives of American consumers. Most decisions to grant credit – including mortgage loans, auto loans, credit cards, and private student loans – include information contained in credit reports as part of the lending decision. These reports are also used in other spheres of decision-making, including eligibility for rental housing, setting premiums for auto and homeowners insurance in some states, or determining whether to hire an applicant for a job...This paper depicts the types of information movements and processes that are most essential to the compiling of credit reports and to the management of credit report accuracy. The Fair Credit Reporting Act (FCRA) and its implementing regulations impose legal duties both on NCRAs and on data furnishers relating to the accuracy of credit report information. All parties to the credit reporting system have a vital interest in achieving accuracy in credit reports. Those who use these reports to make decisions rely upon the accuracy of the information they receive. To the extent the information is inaccurate, that can lead to incorrect decisions to the detriment of decision makers and consumers alike."