Upcoming Changes to the Contents of a Credit Report Based on the NCAP & What it Means for Zoot Clients

Enhanced Public Records standards go into effect July 1, 2017

Back in March 2015, the three national consumer reporting agencies (Equifax, Experian and TransUnion) launched the National Consumer Assistance Plan (NCAP), a venture to make credit reports more accurate, transparent and understandable.  Additionally, the NCAP will make it easier for consumers to correct any errors on their credit report.

One component of the NCAP initiatives is the development of enhanced service-level standards that Public Records (PR) data must meet before it can be included in a consumer credit file. The enhanced criteria focuses on: (i) minimum consumer personal identifying information (PII) of name, address and SSN and/or date of birth and (ii) minimum update frequency of no less than 90 days.

The results of these minimum standards are revealing some major impacts to two types of public records while others will not be impacted at all.

What’s Changing?

According to the consumer reporting agencies, preliminary findings are as follows:

  • No change to bankruptcy public record data.
  • Significant change to civil judgment public record data as preliminary analysis shows approximately 96% of this data may not meet the enhanced PII requirements.  It is very likely that civil judgment public record data will not be part of credit reports after July, 2017.
  • Significant change to tax lien public record data as preliminary analysis shows that as much as 50% of this data may not meet the enhanced PII requirements.  Data changes and impacts associated with the enhanced collection frequency requirements are still being investigated and analyzed.

The three credit reporting agencies and the major model developers have completed some additional analysis as to what the impact of this missing data would mean on typically used scores such as FICO and Vantage. For the most part, models will not be impacted although some score migration will occur for approximately 8 – 10% of consumer credit reports.

For lenders that determine the missing public records data is of concern, one of Zoot’s partners, LexisNexis® Risk Solutions, is offering a product specific to the PR data that based on preliminary findings, may no longer be present in a consumer report.

The RiskView™ Liens & Judgments Report from LexisNexis offers the same nationwide coverage historically included in credit reports. The product allows flexibility to specify the type of judgment and lien content returned in the report, and offers a variety of attributes and individual judgment and lien details.

Potential Lender Impacts

Other lender impacts based on the targeted PR changes may include:

  • Re-evaluation of custom scorecards to determine the impact of the missing data and action based on the re-evaluation.
  • Minor score cutoff changes (FICO, Vantage, etc …).
  • Attributes may be evaluating data that no longer exists.
  • Test cases triggering a work item/risk policy based on data that no longer exists may not fire.
  • Data segments no longer returned may become extraneous and misleading.
  • Reports that single out and/or count the above missing PR data may appear different.

For more information, please visit http://www.nationalconsumerassistanceplan.com/

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