Dun & Bradstreet



Credit Bureaus

While credit has been a key driver of business growth globally, it has also been a key culprit to the global financial crisis. This highlights the importance of credit to the well being of any country and the overall global economy.

A Credit Bureau is an organization that collects data about the credit exposure of individuals and commercial entities from various sources and processes this information into Credit Information Reports. It facilitates lenders to assess the credit worthiness of a borrower, the ability to honor a loan obligation and to price credit accordingly.

Credit Bureaus offer the following benefits to every member of the economy:

  • Facilitate information- based lending and risk-based pricing for credit grantors
  • Enable quick and easy decision making for lenders
  • Provide access to finance to all eligible individuals and companies
  • Encourage responsible lending and borrowing thereby building a sound financial sector

Technology

Developed by our software experts, SilverBladeTM is our state-of-the art technology for credit bureaus. It is built on the fundamentals of speed and accuracy. It supports Consumer and Commercial credit reporting. It powers the Credit Bureau to collect positive & negative information from credit grantors and process it into comprehensive and intelligent Credit Information Reports.

Lenders use these Credit Information Reports to assess the credit exposure of potential borrowers, their payment behavior and risk factor. SilverBladeTM provides credit grantors with a powerful tool to make informed decisions.

In addition to this, our solutions CreditVerdict® version 1 and 2 is being used by several credit bureaus to process large amounts of data into decision-ready reports & insight.

Consultancy

The relationship between Dun & Bradstreet and credit reporting dates back to 1841. D&B has been an active participant of the credit information revolution and is committed to creating a transparent financial infrastructure.

Our rich experience over the years and a proactive team enables us to provide credit bureau consulting to governments, central banks & financial institutions, insurance companies, corporate and credit grantors across the globe.

D&B provides full end-to-end consulting on establishing a Credit Bureau, including:

  • Developing and conducting a feasibility study to evaluate the creation of a Bureau
  • Business plan and strategy formulation
  • Formation, recruitment, marketing and operations management
  • Relationship management with various stakeholders
  • Data collection and dissemination format and methodology
  • Ensure compliance with local/global regulatory framework
  • Adherence to international best practices

D&B has advised several Credit Bureaus across the globe on the above matters and more

Training

D&B has leveraged its rich Credit Bureau domain expertise and valuable insight to provide world class training to Credit Bureau professionals. The training programs use a confluence of experiential, classroom and on-the-job methodology to educate and prepare Credit Bureau professionals and users.

Training for Credit Bureau professionals

D&B provides Credit Bureau training for all organizational levels of the Credit Bureau. The training programs are directed towards intelligent knowledge transfer to Credit Bureau professionals on every aspect of management and operations of the Credit Bureau. Key topics include data loading, data processing, individual and bulk report requirement fulfillment, etc.

Training for Credit Bureau users

The success of a Credit Bureau depends on how efficiently the information can be used by credit grantors. To empower credit granting institutions, (i.e. banks, financial institutions, insurance companies, telecom companies, etc.) with the expertise to use credit information in a powerful way, D&B provides training to users of the credit information systems. The topics covered through training programs include interpretation of credit information reports, scores, payment indices and overall decision making.

Key Topics

  • Introduction to the Credit Bureau world
  • Types of Credit Bureaus
  • Typical Bureau input data
  • Bureau products and services
  • Impact of information on credit availability
  • Fundamental operating principles
  • Mechanics & Success factors
  • Credit Bureaus and credit information sharing laws around the world
  • Global trends
  • International best practices
  • Global trends & International best practices
  • Data Submission Mechanics - Input File Format
  • Data Extraction and Validation Rules
  • Member Liaison and Data Quality Analysis
  • Solution Overview and Functional Architecture
  • Understanding Credit Information Reports
  • Credit Scoring
  • Account Monitoring Solutions
  • Portfolio Monitoring Reports
  • Value Added Products & Services (VAPS)
  • Managing Credit Information Center - Day to Day Operations
  • Customer Support / Member Services
  • Self Enquiry and Credit Bureau Interaction
  • Dispute Resolution and Credit Bureau Interaction
  • Data Management
  • Network & System Administration
  • Code of Conduct & Membership Agreement
  • Basel II and III

Analytics

At D&B we have developed strong and powerful, state of the art predicting modeling technologies and scoring platforms suited to fulfill all the needs of our customer base.

These scoring platforms includes single Predictive Scorecards for Banks, Behavioral Scorings, Cluster based Bureaus Scores, Score per Credit facilities as well as many Basel II/Basel III compliant Scoring Models.

Insight

A Credit Bureau is an organization that compiles information relating to the identity, public record, legal history, credit transaction and credit history of Individuals and Commercial Entities.

A Credit Bureau is an essential element of the country's financial infrastructure as it facilitates access to finance. Credit Bureaus assist in a stable financial sector, by providing better credit availability and improving credit risk management, in addition to providing sound information on the health of the financial sector. It also decreases information asymmetry between borrowers and lenders (the fundamental issue where the borrower knows the likelihood of repaying his or her debts much better than the lender does).

The Credit Bureau provides this information to contracted, eligible subscribers, in the form of Credit Information Reports pertaining to Individual and/or Commercial borrowers.

Depending on the regulatory environment, the availability of and willingness to share credit information by data owners and the technological maturity of the market, the following types of Credit Bureaus may be established:

  • Basic Credit Bureau - Negative credit information only
  • Full Credit Bureau - Negative and Positive credit information
  • World Class Credit Bureau - Negative and Positive credit information, Public or third party information (electoral rolls, registries, courts, immigration etc), Value added products such as Fraud Detection, Account Monitoring of Individual and Commercial Entities' Credit Reports, Credit Scoring and Risk management consultancy

A Credit Bureau is characterized by the following:

  • It does not make the decision whether to grant or decline an application for credit. It focuses primarily on supplying factual credit related data to lenders, to be incorporated into their credit assessment process in combination with the lenders internal credit policies and rules
  • A Credit Bureau is not a provider of a ‘Blacklist’ or a ‘Negative List’ of borrowers. Although some Credit Bureaus may start from the point of collecting default (negative) data only, the intention is to move to collecting a comprehensive view (positive and negative data) of an Individual’s or Commercial Entity’s credit history
  • Data Providers (also called Members) contribute credit information pertaining to their borrowers on a regular basis, usually monthly. The data received by the Credit Bureau is validated prior to it being loaded into its system. Over time the credit history of the borrowers is built, providing a rich source of factual credit utilization and repayment performance data which is very indicative of credit behavior
  • A Credit Bureau may also collect data from Public or Third Party sources such as address data, national identity data, voters or electoral rolls data. This data is typically used for verification or fraud prevention. Courts’ judgment (suits) data may be used in the credit granting process since it is indicative of the financial standing of the borrower
  • In principle, the Credit Bureau manages the data and does not alter data records received from Members or third parties, unless this is done with their express permission. This activity is strictly controlled and closely audited
  • Use of a Credit Bureau services allows Members to review lenders credit utilization, their level of indebtedness as well as their commitment to repaying their credit obligations including missed or erratic payments, as well as identifying willful defaulters or possible fraud
  • A Credit Bureau enables the confidentiality of Members’ data as well as the data privacy of borrowers

The following are some of the benefits of having a Credit Bureau:

  • To Lenders
    • Helps to sort bad borrowers from good ones
    • Saves time spent on borrower evaluation
    • Reduces the cost of screening borrowers
    • Prices loans adequately in accordance with the risk of the borrower
    • Reduces overall system risk
  • To Borrowers
    • Helps to build reputation collateral i.e. a history of responsible credit lending
    • Provides access to credit to deserving borrowers
    • Rewards good borrowers by easing access to credit, lower interest rates and so on
    • Enables borrowers to monitor and improve their credit records
  • To Regulators
    • Helps to monitor efficient allocation of credit
    • Provides comprehensive and constantly updated data on borrowers and lenders – effective credit risk monitoring for the economy
    • Facilitates credit expansion without compromising on the quality of credit
    • Reduces Non Performing Loans and the probability of defaulting on loans, in the economy

Fundamental operating principles underpin the successful functioning of any Credit Bureau. These operating principles are:

  • The Principle of Reciprocity
    • Data may be accessed based on the data being supplied by the lender. A lender supplying only negative data may access only negative data, a lender supplying positive and negative data may access positive and negative dat
  • The Principle of Neutrality
    • Equal treatment for all Individual and Commercial entities
    • Provide only factual credit related and demographic data (name, ID or passport number, date of birth, gender, address and contact details) or firmographic data (name, license or registration number, address and contact details)
    • No opinions are formed or made regarding the creditworthiness of borrowers
    • Efficient Dispute Handling
    • A borrower has the right to access and review his/her own Credit Information Report at a reasonable fee
    • A record of who has received the Credit Information Report must be kept
    • The borrower has the right to challenge any data in the Credit Information Report and to the correction of any errors
    • Right of redress to any lender who has received an erroneous Credit Information Report
  • Security Standards
    • Confidentiality and privacy of information must be enabled
    • Provide a secured environment, both physical (CCTV, access control to offices and computer rooms) and logical (firewalls, intrusion detection, password access)
    • Only authorized lenders or Credit Bureau personnel may access the credit information
    • Credit Information Reports may only be used for authorized purposes

In order for a Credit Bureau to be successful the following key factors must exist:

  • Advanced technologies underpinning the operation of the Credit Bureau
  • Rich sources of data
  • Full and regular sharing of data
  • Data accuracy and completeness
  • Diverse value added products
  • A sound legal framework