In a recent blog post, the World Bank highlighted the importance of credit reporting agencies (CRAs) to governments, businesses and consumers as they recover from the economic fallout caused by the COVID-19 pandemic. At TransUnion, our mission is to help build trust between businesses and consumers through the use of data that paints a full and accurate picture of an individual. We call this Information for Good – and according to the World Bank, it could be the key to a speedy recovery from this time of amplified risk.
The World Bank outlines a few key recommendations for CRAs including providing consumers with access to free credit reports, giving guidance and providing training to furnishers on data-reporting requirements, and automating dispute handling processes. TransUnion agrees with these recommendations, and has taken important steps in each of these areas.
Empowering consumers to protect their financial health
TransUnion, along with our industry peers, is offering free weekly credit reports to all Americans. Having increased access to free credit reports empowers consumers to keep track of changes to their credit information, and provides peace of mind during this difficult time.
Credit vigilance is critical, and consumers are advised to review their credit reports frequently to understand the information that is being reported about their payment behavior. We understand that many people are struggling to pay their bills right now – and the single most important action those consumers can take is to talk with their lenders to find out what kind of assistance is available to them. The Coronavirus Aid, Relief and Economic Security (CARES) Act places special requirements on companies that report payment information to credit reporting companies, giving consumers access to financial relief.
Supporting data furnishers with guidance and training
TransUnion is also working with its U.S. trade association, Consumer Data Industry Association (CDIA), and industry peers to develop additional proactive solutions to help impacted consumers. CDIA has provided guidance to data furnishers about how banks and creditors can help consumers manage their obligations should their financial health be affected by the COVID-19 pandemic.
These solutions are similar to ones commonly made available on regional levels as a result of natural disasters and include reduced payments, interest-only payments or complete forbearance. As the pandemic has evolved, we’ve continued to have industry-wide conversations on how to best support consumers in need.
Providing easy access for consumers to get credit help
TransUnion is also providing consumers with free tools and resources to help manage their credit health. Our dedicated COVID-19 support center provides helpful consumer resources such as information about how to talk to their lenders and creditors about financial hardship options, links to government assistance programs and consumer help organizations and a list of non-profit free credit counseling organizations, all of which can help ease the financial burden caused by these challenging times.
These resources are in addition to our general support center, where consumers have easy online access to freeze their credit, initiate a dispute, set up fraud alerts or obtain a free copy of their credit report.
Maintaining the integrity of the consumer reporting system
These solutions are just a snapshot of the work we’re doing to support consumers and businesses as they navigate these new challenges. In addition to supporting consumers and businesses through the pandemic, TransUnion is also committed to maintaining the integrity of the consumer reporting system that allows for safe and reliable access to credit, which will be essential for our economic recovery.
We are often asked if suppressing consumer reporting information would be an effective way to help consumers impacted by COVID-19; however, this approach could end up harming consumers in the long term. Without the most recent consumer reporting data, lenders over time may charge higher prices for credit or loans because they lack complete and accurate data available to predict a consumer’s ability to repay. Additionally, monthly data reporting helps protect consumers from identity theft and financial fraud by providing mechanisms to detect atypical financial activity.
As the World Bank highlighted, trust has never been more critical to business than it is right now. That’s why we’re working as an industry to continually improve our credit reporting systems and provide resources to the consumers we serve to take charge of their financial health. We know that this is a difficult time for Americans, and as we all face this crisis together, TransUnion is committed to providing the tools and resources consumers and businesses need to manage their finances through the pandemic and beyond.