The Ultimate Cheat Sheet on Selecting a Credit Reporting Vendor
For decades, financial services professionals have bemoaned the slow pace of advancement in innovation and technology, watching healthcare and other industries forge way ahead. However, that has changed in the past few years, with staggering sums of venture capital flowing in and new vendors popping up across the consumer lending landscape.
There is, however, a consequence in play. A ton of money is being spent on sales and marketing — adding more noise and hype to sift through. This does not make the job of vendor selection committees any easier.
As such, we have created this 'cheat sheet' on what to look for when seeking a credit reporting service provider.
In a Nutshell
While there is no shortage of vendor options, we do propose the following shortlist of procurement requirements:
Comprehensive products and services with supplemental solutions to work smarter
Adds value, rather than just being an intermediary passing data onward
Value pricing with a reputation for being 'service first'
Secure, compliant, and trustworthy
Will act as a partner, not just a vendor
First and foremost, the vendor must have a robust set of credit reporting products and services. Clients often have a wide variety of credit needs (e.g., mortgage, auto, credit cards, unsecured, loan servicing, etc.), so vendors need a full menu. Plus, a major trend is vendor consolidation, where bigger is better due to unsustainable vendor oversight requirements — fewer vendors is a common approach.
Look for vendors with:
Tri-merge credit reports, which remove duplicate tradelines to deliver one clean, comprehensive report
Business credit reporting
Supplemental credit tools and services that make your production staff more efficient beyond the main report, with trended credit data, risk alerts, and other essential profile variables
Credit Rescore — A streamlined way to correct or remove inaccurate information in a borrower's credit report, either from one or multiple bureaus. Ensure a 'rush service' is available for a reasonable fee
Investor approved reports in full compliance with investor/GSE guidelines, so you get a complete and accurate view of creditworthiness
Also, keep in mind that simply aggregating data from reliable sources is only half the value proposition. You are encouraged to look for vendors that have the keen ability to structure and present data into actionable and easy-to-digest information. Redundant information can be removed, and in some products, you can choose how you want the information delivered, so you have control over your borrower's report.
Easy to do Business With
You need more than just a vendor. You need a partner that fills in the potholes in the often-bumpy road from loan application to closing. There are several ways vendors can make life easier for you, such as:
Flexible Ordering Options
You should have the option to integrate directly to your loan origination system (LOS), as well as place orders by logging into a proprietary online portal. Further, the integration should not require an army of IT people; it should be thorough and seamless.
The online portal should enable your production staff to self-serve in real-time, placing orders and checking status. Therefore, it needs to be user-friendly and intuitive, requiring minimal training.
At Informative Research, we have cultivated a multi-channel support model, featuring:
Traditional phone and email support
Click 2 Chat — Connect with a real support member within a minute
Action Center — Client portal to a better workflow; instant action
Info Center — Access to helpful information, always at your fingertips
"Lights Out" Integrations— efficiently integrate the software you already use
Beyond the technical capabilities, discuss the vendor's relationship management model, their strategy to staff to your needs, and the expected service level agreements (SLAs). Lastly, engage with a partner that won't always tell you what you might want to hear but instead what you need to know.
Security, Risk, and Compliance
Consumer credit data is obviously sensitive information, therefore, a large target for fraudsters. Therefore, you need a secure and trustworthy vendor partner. Also, keep in mind, after ordering, the data in transit back to you must be encrypted and strictly secured, as should the data at "rest" or stored.
Your credit reporting partner needs to comply with the Fair Credit Reporting Act (FCRA) and deliver products and services that align with or elevate your compliance requirements. Alerts are also of critical importance, FACTA Red Flags, and assigning risk severity levels that help you detect fraud and identity theft. The genuinely savvy vendors will also go a step further and recommend actionable tasks.
The credit reporting vendor you seek should demonstrate a longstanding commitment to service and innovation — leveraging their experience and continually pushing boundaries. Look for signs that the vendor truly sees no finish line with their solutions or their service.