Data Test
In order to access information about an individual’s credit history, a lender must share data on its loan book with TransUnion. This takes place under the Principles of Reciprocity (PoR). The main thrust of the Principles of Reciprocity is that data are shared only for the prevention of over-commitment, bad debt, fraud and money laundering and to support debt recovery and debtor tracing, to aid responsible lending. More information on the PoR can be found here.
Your credit union will need to submit a file for testing by TransUnion. This file must contain all your loan accounts. The member does not have to have given consent as the data is used purely for testing and is not shared with any third party.
The data is tested for accuracy in line with the Postcode Address File (PAF) to ensure that there is a high match rate (>95%) between the addresses recorded in your software and those held by TransUnion.
You should also be recording a default flag on your systems to indicate when a loan has defaulted. Typically this is after six months of consecutive missed payments. If the member has entered into an arrangement to pay or is confirmed deceased, this should also be recorded. You can find more information about the: Principles for the Reporting of Arrears, Arrangements and Defaults at Credit Reference Agencies by downloading this document from SCOR here.
If you are already reporting to Experian, TransUnion or Equifax then this should be a relatively straightforward process that takes around two weeks. If you are not currently reporting to a credit bureau – please get in touch so that we can provide some advice on helping you pass the requirements.