6 Tips to Get Credit Reporting and Disputes Processes Ready for Regulatory Review

This blog shares six best practices to prepare your credit reporting and disputes processes and operations to be regulator-ready.

If examiners from federal regulatory agencies were to walk into your organization tomorrow, would you feel confident? Accurate credit reporting and dispute handling is a priority for furnishers and the federal agencies who regulate them. Bridgeforce advises clients in the credit reporting arena to expect increased exam activity and decisive enforcement when issues are found.

6 Best Practices for Credit Reporting Management Compliance

The slow trickle of CFPB-issued penalties has begun to increase. Over the years, the CFPB has levied fines for credit reporting misconduct ranging from neglecting to fix known errors to alleging that a lender failed to remedy harmful inaccuracy issues.

The solution for data furnishers lies in the ability to (1) design control routines that identify inaccuracies and (2) ensure follow through with appropriate mitigation actions.  Use these tips to remain compliant and ensure that your processes are credit reporting and disputes regulator-ready.

1.  Maintain Operational Procedures that Describe your Furnishing and Disputes Processes from End-to-End

Operational procedures fill the gap between your company policy and the desktop level procedures that support your agents’ daily on-the-job activities. In one enforcement action, the CFPB specifically cited a failure to maintain written policies and procedures on the accuracy and integrity of information furnished.

Regulators want to understand your end-to-end actions, and how you know that your processes are working accurately and effectively. This is where the operational procedure is critical. It describes service levels, controls and oversight mechanisms that ensure the entire process is working as expected.

Clear, organized, and consistent documentation of procedures can make a world of difference when it comes to the time to evidence the work that is already happening today.

RELATED CONTENTBuild consistency and clarity into all your procedures with this guide


2.  Ensure Strong Credit Reporting Operations Governance and Oversight

The most compliant credit bureau reporting groups maintain oversight and governance from all relevant stakeholders in the company.

It is important to pull stakeholders together, at least annually, to perform end-to-end reviews of your organization’s furnishing and disputes operations. This collective approach ensures that ownership and accountability of consumer data accuracy is collaborative.

Your Legal and Compliance Departments should stay up to date with the most recent regulations and practices for furnishing consumer information. Document any changes and the appropriate operational enhancements made to address them. This map of what, how and why changes occurred will memorialize your actions for internal operations and regulators.


3.  Monitor Controls for Data Furnishing Accuracy

Ensure controls before and after file transmission identify any potential data accuracy issues. Then, follow through to remedy issues as appropriate. Maintain frequent internal reporting on discrepancies that also monitors performance over time.

Whenever you identify potential issues, you need to demonstrate that the root cause was uncovered, and fixes were made. Trend reporting over time can demonstrate the benefit of this feedback loop in action.

Use a tool like the Bridgeforce Data Quality Scanner solution (DQS) to evaluate Metro 2® data against 390+ risk ranked business rules.

CLIENT SUCCESSA client improved accuracy and reduced disputes with DQS


4.  Provide Change Management Oversight

Maintain consistent change management procedures to ensure all stakeholders are aware of changes to credit bureau reporting processes, and any relevant upstream and downstream impacts.

Additionally, people responsible for furnishing need to have a seat at the table for both systemic and operational process changes so they can watch for downstream impact on furnishing accuracy.

Strong governance and oversight practices help provide the lines of communication and transparency needed for robust change management procedures.

Given the highly interdependent nature of credit reporting, it is critical that you identify all dependencies when implementing changes that will impact reporting.

RELATED CONTENTWatch a short video on how to manage change in today’s current environment


5.  Use Independent Auditing to Ensure Consistent Compliance

As part of a robust three lines of defense control framework, be sure to perform independent audits. An audit ensures that there is a regulatory review, consistency checks, ownership identification, and transparency of policies and procedures. Other audit areas should include transaction and control auditing, corrective action tracking, dispute completion timeliness and corrective action validation.

In addition to an independent audit, you will want an agnostic group to provide a thorough review of your existing environment, which requires understanding the governance, functional structures, control programs, and documented activities to evidence compliance.


6.  Analyze Credit Reporting Disputes Handling

Assess your disputes management efficiency with a deep dive into processes. Triage issues discovered through root cause analysis and create a pipeline with action planning, ownership, and evidence.

Consider a case management system to automatically pull indirect disputes (including supporting documentation), into a sole source system. This way, disputes are easier to manage, distribute, escalate, and monitor for important SLAs (Service Level Agreements).

RELATED CONTENTWhen your dispute processing lacks efficiency, build a business case for a disputes case management system

Secure Your Credit Reporting Management Compliance Today

No organization can be too safe or diligent when furnishing consumer data and handling disputes. Regulators continue to seek out unresolved issues that cause harm to consumers or the consumer data ecosystem.

By implementing and maintaining best practices within your credit reporting and disputes management operations you will keep your organization and customers out of harm’s way.

If you are not sure of how regulator-ready your credit reporting and disputes processes are, contact us. We will assess and make sure that you have consistent and thorough procedures, robust lines of communication across all three lines of defense and appropriate controls and reporting throughout the process.


[Editor’s notes: written by Ty Stallworth, former consultant at Bridgeforce; content updated 2024]

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