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Blogger
HiLine
Posts: 2,831
Registered: ‎10-19-2012

Relationship between creditors and CRA's?

I've heard that creditors pay CRA's for access to consumer credit reports. Do creditors pay per view or do they pay a periodic subscription? 

I also understand that creditors report to CRA's. Do CRA's pay creditors to feed them the data? Or are creditors required to provide data as a condition for having CRA's service? Or do creditors volunteer the data without being asked? 

 

How does this relationship work exactly?

Moderator
guiness56
Posts: 22,408
Registered: ‎01-17-2008

Re: Relationship between creditors and CRA's?

Creditors pay the CRAs to be able to report accounts directly to them.  There is certain criteria they have to meet.

 

A creditor can also use a credit reporting service that collects and reports their accounts for them.

Blogger
HiLine
Posts: 2,831
Registered: ‎10-19-2012

Re: Relationship between creditors and CRA's?


guiness56 wrote:

Creditors pay the CRAs to be able to report accounts directly to them.  There is certain criteria they have to meet.

 

A creditor can also use a credit reporting service that collects and reports their accounts for them.


Interesting. Do you know what creditors gain by reporting to CRA's?

 

Valued Contributor
JM-AM
Posts: 3,303
Registered: ‎06-09-2010

Re: Relationship between creditors and CRA's?

They hope to gain new additional business, thats why when credit is good you have al sorts of offers for more credit. Its a way or creditors and lenders to see if they would like to do business with you.

 

Now on the other side of the boat, it helps them determine to stay far far away from an individual or company when they are not performing to their obligations to other creditors and lenders.

 

Then by them listing the lates and any negative they hope you become a better customer and pay your bills according to your agreed upon obligations in your contracts as this information hurts you for several years and can impact many different things in your life. 

 

In todays world credit reports play a big part in your life. Many jobs today check your credit report, obtaining a license for many business need to have good credit for approval of license, many relationships today fail as soon as the one of them find out about the others credit, buying a home credit score qualifications have increased and keep increasing, these are to just name a few of the things that credit reports are used for that have an impact on 75% of our population.

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May all your dreams and wishes become a reality!
Blogger
HiLine
Posts: 2,831
Registered: ‎10-19-2012

Re: Relationship between creditors and CRA's?

I mean, if I am a single creditor, what do I gain from reporting to the CRA's, given that other creditors are already reporting?

Valued Contributor
JM-AM
Posts: 3,303
Registered: ‎06-09-2010

Re: Relationship between creditors and CRA's?

The same would apply...

 

If you report negative information then myself being a creditor looks over that individual or company a little harder to determine if I want to extend credit to them.

 

If no one reports it would be a little chaos in todays world and environment. Can you imagine how our economy would be now if eveyone received credit or a loan on their word they are going to pay the debt? 

 

You gain access to the reporting agencies to see how potential clients may be of need of some financial offer you may have.

 

To save on the expense this is why some creditors and lenders only report when you have negative information.

 

When I was growing up we had a saying the best way to see who your friends were was to lend them 20 dollars and see who pays you back. If they didnt pay you back you most likely would tell your other friends and this way they wouldnt lend them money knowing they wouldnt get paid back.

Good Luck
May all your dreams and wishes become a reality!
Blogger
HiLine
Posts: 2,831
Registered: ‎10-19-2012

Re: Relationship between creditors and CRA's?

You are absolutely right. Taken as a whole, creditors should report to the CRA's because they benefit from the credit database that the CRA's collect.

 

My question has to do with the incentives for each creditor to report frequently and accurately. What if I am a lazy creditor and never report anything to the CRA's? I would still be able to pull reports from the CRA's to obtain my credit applicants' credit profiles, as long as I pay for the reports, correct? Obviously the CRA's need my data, but what incentives do they give me to report those data? 

Valued Contributor
JM-AM
Posts: 3,303
Registered: ‎06-09-2010

Re: Relationship between creditors and CRA's?


HiLine wrote:

You are absolutely right. Taken as a whole, creditors should report to the CRA's because they benefit from the credit database that the CRA's collect.

 

My question has to do with the incentives for each creditor to report frequently and accurately. What if I am a lazy creditor and never report anything to the CRA's? I would still be able to pull reports from the CRA's to obtain my credit applicants' credit profiles, as long as I pay for the reports, correct? Obviously the CRA's need my data, but what incentives do they give me to report those data? 


Credit reporting agency is a business. It conducts business as usual and I am sure has specials and discounts according to your activity with them.

 

So besides being able to have the access to their database 24 hrs a day 7 days a week, the more activity you perform with reporting and such, then more of a discount you are entitled too. I am speculating here....

 

The other benefit would be your normal business expense and write off due to the expense of the service.

 

 

Good Luck
May all your dreams and wishes become a reality!
Blogger
HiLine
Posts: 2,831
Registered: ‎10-19-2012

Re: Relationship between creditors and CRA's?


JM-AM wrote:

 

So besides being able to have the access to their database 24 hrs a day 7 days a week, the more activity you perform with reporting and such, then more of a discount you are entitled too. 

 


That would make sense. Can somebody please confirm this? :smileyhappy:

Valued Contributor
GregB
Posts: 1,670
Registered: ‎05-24-2007

Re: Relationship between creditors and CRA's?

[ Edited ]

I don't think that is a correct conclusion.

 

The CRAs have a variety of products for the huge range of businesses that want the data. At the small end are accounts for lenders that wish to buy a small number of reports and pay a fee plus another fee for each report. In the middle are accounts where they get reports and can report data. Those are expected to report correctly if they report data. Most commercial lenders are large enough that they set up an account with a CRA and can pull reports and the data is reported automatically.

 

Stretching this to say they are rewarded for reporting seems extreme since all big creditors report all data on every account automatically every month to all three CRAs.

 

 

 

 


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