provides credit report retrieval tools to help companies comply with the Fair And Accurate Credit Transactions Act (The FACT Act)
FACTA, the Fair and Accurate Credit Transactions Act establishes new requirements for credit reporting agencies and their customers. To comply with the new law, companies that use credit reports will need to update software and add new factors to their credit decision systems. As a credit report toolkit, the MERit Credit Engine can help software developers and end-user organizations meet FACT Act compliance deadlines before the law goes into effect.
The credit bureaus, Experian, Equifax, and TransUnion, have each made changes to their system-to-system data segments for transmitting and storing credit reports. Systems that generate human-readable reports, credit scores, and simple decision messages will benefit from the MERit Credit Engine's built-in handling of the new FACTA-related alerts.
Consumer Fraud Alerts, Military Active Duty Alerts
Lenders must take certain actions in response to a fraud alert which an identity theft victim (or potential victim) has had placed in their credit file. Military Active Duty Alerts impose the same kinds of requirements. The MERit Credit Engine has been updated to display the new alerts on its human-readable output reports. For companies generating custom credit reports and scores, the MCE now provides a database flag for consumer fraud and military active duty alert notification.
Address Discrepancy Indicator
When addresses in the credit inquiry fail to match addresses in the credit bureau files, an Address Discrepancy Indicator (ADI) alert is required under the new law, helping to fight identity fraud. The MERit Credit Engine includes the indicator in printed credit reports. For automated operations, it provides a flag in the database.
Inquiry Key Factor
In the past, credit scores were accompanied by four reason codes, identifying key factors that may have lowered the consumer's credit rating. The new law requires notification in the event "too many recent inquiries" was a factor that impacted the credit score, even if it wasn't one of the top four factors. Each bureau handles this possible "fifth reason code" differently. The MERit Credit Engine indicates the situation in its human-readable reports, and provides a bureau-neutral way to handle it for automated credit systems.
Medical Information Suppression
For medical debts, the FACT Act requires the credit bureaus to suppress output of the reporting subscriber's name as a consumer privacy safeguard. This introduces new challenges for credit retrieval systems that must correctly merge medical tradelines. The MERit Credit Engine merge module has been updated with new logic to correctly stack medical tradelines, even without the formerly-available subscriber data.