Have you mastered the multi-bureau data conundrum?

Lenders rely on credit data to assess borrowers, unfortunately, this information can be spread across multiple different credit reference agencies (CRAs), and with each CRA holding a different piece of a borrower’s financial puzzle, it makes it difficult to get a complete and accurate picture.

When gathering data from multiple CRAs, there are risks to be aware of. Differences and inconsistencies in reporting formats, duplicate records, and consolidating credit information can all impact the accuracy of a lender’s affordability assessment.

It is important to be aware of the potential pitfalls so you can master the Multi-Bureau Data Conundrum.

Seeing Double? The Problem with Duplicate Data

The same credit information may appear several times across different CRAs, leading to an overestimation of a borrower's credit exposure. For instance, if a borrower has a mortgage, multiple CRAs may report it causing duplication when the data is merged.

By correctly identifying and removing these duplicates, lenders can ensure they are working with a clean, accurate dataset, therefore allowing for a more precise affordability assessment. 

However, differences in CRA data formats can make it challenging to manually identify and remove duplicate information.

Spot the Difference - Understanding How CRAs Report Data

Different CRAs report data in different ways.

One may list an outstanding finance as "personal credit," while another categorises it as "unsecured lending". Despite being the same loan, discrepancies in outstanding loan labels could cause confusion when assessing a borrower's financial health.

By converting all data into a standardised format, lenders can ensure a seamless comparison across sources, making decision-making more accurate and efficient. 

Almost There... Completing the Data Consolidation Process

Even after cleaning and standardising data, it still needs to be consolidated into one easily accessible location. This takes immense time and resources, but having a single, reliable source of truth is crucial for efficient decision-making.

In an industry where precision and trust are paramount, the ability to access accurate, consolidated data can be the difference between success and missed opportunities.

When lenders deduplicate, standardise, and consolidate credit data, they can create a true picture of the customer's credit file. This enables them to assess affordability with confidence, considering income, expenses, and outstanding debts in an organised way.

Only by mastering the multi-bureau data conundrum can lenders take control of their decision-making, improve efficiency, and stay ahead in an increasingly competitive market.