Flying on the Wings of Curiosity in the Sky of Prosperity… What Determines a Credit Bureau’s Success

As published today by The National Association of Credit Managers, the Credit Manager’s Index is now at the highest level seen in over a year. The “New credit application” index has grown from 59.5 up to 60.4 this month.

The global economy is recovering and the flow of credit applications is increasing. As a result, the challenges of credit reference bureaus must rise above the interchange of credit information.

Financial management professionals require more advanced services: application processing and loan servicing capabilities, identity fraud prevention, and more. The need for these advanced services arises because financial institutions strive to streamline their workflow and ensure the most accurate decisions.

Data aggregation services are essential not only for client origination. Also, monitoring payment patterns significantly adds value to credit reference services. For instance, in 2011, consumers were more likely to pay their auto loans before their credit cards and mortgages, according to TransUnion's Payment Hierarchy study. Over one third of those consumers with delinquency were delinquent on a mortgage while current on their auto loans and credit cards. Information on divergence in payment patterns in this case would have been of value for lenders in each of those sectors.

Satisfying informational needs of the subscribers is a core function of any credit reference institution, but providing fragments of information is not enough. To succeed in today’s market, credit bureaus must implement a robust framework that will allow subscribers to maintain the complete profiles of the borrowers.