The CFPB’s November Quarterly Consumer Credit Trends report examines how often lenders report, or furnish, information on borrowers’ actual payment to nationwide consumer reporting agencies. The report finds that actual payment furnishing for installment loan products including mortgages, auto, and student loans has steadily increased between 2012 and 2020. Over the same period, actual payment furnishing for credit card and retail revolving accounts significantly decreased.
As credit information is a critical input into the financial ell-being of millions of consumers, describing trends in furnishing practices can help deepen policymakers’ and market participants’ understanding of the consumer reporting system’s key role in consumer access to credit, especially in the wake of the COVID-19 pandemic when credit standards have tightened and there has been increased strain on consumer finances.
Credit reporting is generally voluntary under the Fair Credit Reporting Act (FCRA). Financial institutions generally have the option to decide whether or not to report to bureaus, and if so, what information to furnish. The FCRA does have requirements about the accuracy of the information that is reported.
The report provides background on the consumer reporting market, the prevalence of actual payment data furnishing, and demonstrates differences in revolving and installment loan furnishing.
Tradeline reporting reflects: credit cards at 40%; retail revolving credit at 71%; student loans and auto loans both at 91%; and mortgages at 95%.
The report’s conclusion states:
Analysis of CCP data reveals significant changes in the furnishing of actual payment data since 2012. Across the three most common installment loan types, shares of tradelines with actual payment amount information increased to over 90 percent, with mortgage tradelines experiencing the largest increase in furnishing. By contrast, shares of revolving and credit card tradelines with actual payment data significantly declined over the same time period. This trend may reflect attempts to prevent account poaching of consumers by other credit card issuers. Furnishing actual payment information appears to be an either/or proposition for credit card issuers. Additional research could further inform our understanding of credit information markets and consumer access to credit, such as determining whether the reduction in the supply of payment amount data has an impact on the terms or availability of credit for consumers.
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