Reporting payment data to the credit bureaus is important to any business that extends credit to businesses or consumers. However, not every business makes the effort to report to the bureaus. Why? Sometimes, it’s because the credentialing process seems a hurdle too high to conquer.
What is credentialing?
Credentialing is the verification process each of the four major credit bureaus requires businesses to complete before they can begin submitting customer data. This process proves to the credit bureau that the business has a legitimate reason, and is lawfully allowed, to report and receive credit information.
The Fair Credit Reporting Act (FCRA) provides overall guidance for all credit reporting agencies. A federal law since 1970, the FCRA ensures that consumer reporting agencies practice in a “fair and equitable manner.” It also requires “confidentiality, accuracy, relevancy, and proper utilization” of consumer credit data.
Within the last decade, however, the three largest credit bureaus, Equifax, TransUnion, and Experian, created their own credentialing processes. Each of these policies adds even more stringent requirements to the FCRA rules. As a result, each bureau will ask you for different information before you can get started reporting credit to them.
As a credit reporting service, Datalinx representatives stay on top of the credentialing requirements for each credit bureau. Although the following rules may seem overwhelming, don’t worry. Datalinx is here to help.
TransUnion Credentialing
According to TransUnion’s documentation, its credentialing process “is intended to ensure compliance with TransUnion business policies as well as applicable laws, rules, regulations, and standards” that may apply.
TransUnion requires all applicants to:
- Submit an online registration application or company profile form
- Complete supporting product and service agreements
- Agree to an onsite inspection of the primary business location
- Allow TransUnion to verify your primary phone number through a third party
Some businesses, such as those that aren’t incorporated or have been in existence for less than a year, have additional rules. These may include providing TransUnion with:
- Authorization to review credit reports of the owner(s)
- A copy of a government-issued photo ID
- Bank statements
- Lease or proof of ownership of business property
- Recent telephone bill
- Certain sections of commercial insurance policy
Experian Credentialing
The process to qualify to report consumer or commercial payment data to Experian is similar to that of TransUnion. Experian requires applicants to complete the following:
- Membership application
- Three-page data release agreement
- Subscriber questionnaire document
Experian also requires applicants to submit copies of these documents for verification purposes:
- Business license or articles of incorporation
- Dated material that shows the company’s time in business
- Company literature, advertisements, and business cards
Experian also verifies your phone number to be sure it’s registered to a commercial business number and to your business address.
Equifax Credentialing
Equifax requires potential data furnishers to establish membership by completing an online application and signing a data agreement. Datalinx will help you determine if you’ll need to submit additional information.
Other Data Furnishing Requirements
Paperwork is only one step in the process to begin reporting credit data. The credit bureaus also want to know that your company has the appropriate software to submit and receive files in Metro 2 format. Metro 2 is the only file format the bureaus accept, and converting your payment data into Metro 2 requires special software. Datalinx provides our customers a software solution that seamlessly integrates with your existing systems.
Partnering with a company like Datalinx simplifies the credentialing and setup process. We’ll help you through every step so your organization can start reporting consumer and commercial credit information within a matter of weeks. Give us a call today for more information.
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