On November 12, 2020, the Consumer Financial Protection Bureau unveiled its most recent quarterly report on consumer credit trends, which delves into the prevalence of factual payment data in consumer credit reporting. Decisions made by financial institutions regarding the data they transmit (“furnish”) to consumer reporting agencies have significant ramifications for the criteria used by lenders to assess consumers. For individuals seeking credit, the presence of factual payment data can influence the credit products they are offered and the terms of the credit extended to them.
This report is part of a series on consumer credit trends generated by the Consumer Financial Protection Bureau, utilizing a longitudinal sample of around five million de-identified credit records from one of the three major consumer reporting agencies, representing the nation as a whole.
Key discoveries from the report include:
- Across the three primary types of installment loans (auto loans, student loans, and mortgages), the proportion of credit accounts with factual payment data has generally increased, with over 90 percent containing such data by March 2020. However, for revolving and credit card accounts, there has been a significant decrease in the provision of factual payment data over the same period. The share of credit card accounts with factual payment data peaked in the fourth quarter of 2013 at 88 percent and has since declined by more than half to 40 percent. Conversely, other data variables such as balance amount and credit limit are consistently reported across loan types.
- The inclusion of factual payment data in credit card reporting seems to be an all-or-nothing scenario for issuers. They either provide such data for almost all accounts or none at all.
- In 2013, around 70 percent of the largest credit card issuers reported factual payment data for nearly all accounts. By 2020, only approximately half of the issuers with recent payments were furnishing this data.