Consumers Demand To See Payment History
In recent years, there has been a growing trend among US consumers to pay more attention to their credit reports and try to maximize their credit scores. This trend has been fueled by a number of factors, including increased awareness of the importance of credit scores, the availability of free credit monitoring services, and a desire to qualify for better loan terms and credit card rewards.
As consumers have become more aware of the importance of credit scores, they have become more proactive in monitoring and managing their credit. This includes checking their credit reports regularly to ensure that the information is accurate and up-to-date, and taking steps to improve their credit scores, such as paying bills on time, reducing credit card balances, and limiting new credit applications.
One area where consumers have expressed a desire for improvement is in the reporting of positive payment history to credit bureaus. There are several reasons why consumers believe that positive payment history should be reported to credit bureaus. First, it can provide a more complete picture of a consumer’s creditworthiness, as it shows that they are responsible with their finances and are able to make payments on time. Second, it can help to offset negative information on a credit report, such as missed payments or defaults, which can have a significant negative impact on a consumer’s credit score.
Owing in part to the complexity of generating the specialized Metro 2 files required for reporting to the credit bureaus, many lenders and credit card companies lack the necessary infrastructure and do not report payment data. Others only report negative information, such as missed payments or defaults, which can have a significant negative impact on a consumer’s credit score. Additionally, a February 2023 report by the Consumer Finance Protection Bureau revealed that some banks are actively suppressing payment data.
Consumers have taken notice. Understanding that the presence of their positive payment history can help to improve their credit scores and make them more attractive to lenders, consumers are seeking out financial products from firms that have committed to reporting all payment data.
For lenders that are looking to respond to this consumer demand, Bloom Credit provides a turnkey furnishment solution for reporting payment data to all the major credit bureaus. The Bloom platform greatly simplifies integration by ingesting statement data and doing the heavy lifting of transforming into the Metro 2 format, and validating the data for accuracy.
While the trend towards maximizing credit scores is a positive development for consumers, it’s important to remember that credit scores are just one factor that lenders consider when making credit decisions. Other factors, such as income, employment history, and debt-to-income ratio, are also important considerations, and can have a significant impact on whether a consumer is approved for a loan or credit card.
Overall, the trend of US consumers paying more attention to credit reports and demanding to see their payment history is a positive development for the US economy. By being proactive in managing their credit, consumers can improve their chances of qualifying for better loan terms and credit card rewards, and can also save money in the long run by paying lower interest rates. When consumers are denied credit or are asked to pay higher interest rates because lenders don’t see the full picture everyone loses. And as consumers demand to see even more positive payment data in their credit reports, it becomes even more important for lenders to work with firms like Bloom Credit to ensure data is reported accurately and in a timely manner.