Table of Contents
Audience: Loan Servicer or Collector, Upper Management, Developers, Accounting, Loan Servicing/Collections Managers, Administrator, Compliance, Data
Introduction
Many lenders report their borrowers' debt and repayment history to credit bureaus, who collect information from countless lenders and compile it into credit reports. For the lender, this might serve as a bit of a deterrent, keeping would-be delinquent borrowers from skipping payments. At the same time, it's a means of helping other lenders (and thus the industry as a whole) by identifying risky borrowers.
LoanPro's Loan Management System (LMS) makes it easy to report credit, although it does require a bit of setup. This article will explain the process at a glance, and then Report Credit will walk through the specifics.
How does the Credit Reporting Tool Work?
In LoanPro, there are three main ways to report a borrower's credit to a Credit Reporting Bureau: through Credit Manager V, by querying the database directly, querying through Data on Demand.
With any of the methods, you'll need a credit reporting account with at least one of the major credit bureaus (which is different than a credit pulling account).
Database Query
If you have access to the database and a technical team who can handle a complex database query, we'd recommend pulling the information yourself and reporting it directly. If you jump ahead to the Credit Reporting Options section of our Report Credit article, where we'll go over the specific tables and columns you'll need to query.
Export to Credit Manager
If you don't have the technical resources to query the database yourself, you can still get the data through the Credit Report tool in the LMS UI. This tool ultimately just a data export, similar to the Excel Data Dump tool. But it gets a little more complex when it comes to what you do with that data.
You'll need to purchase Credit Manager, a credit reporting software. Credit Manager can only be installed on Windows computers. Once you have set up an account with a major credit bureau and have installed Credit Manager, you are ready to report credit.
The whole process is explained in our Report Credit article, but let's go over the basics. In LMS, you'll open up the Account Manager. If you want to report only some of your loans, use the search filters to narrow it down to a specific set. If you want to report on all of your loans, you don't need to filter anything.
From the Data Options drop-down, click 'Generate Credit Report', which will take you to the Credit Reporting page. From here, click the blue 'Export' button in the top right. A new report file will be generated below, which you can then download.
The file you download will be an encrypted .zip file. To unzip it, you'll need the password from the password column, right next to the download button. Afterwards, you can import it into Credit Manager V, who will send it to the credit bureaus you have a reporting account with.
Data on Demand
If you are without a dedicated technical team, we'd recommend using Data on Demand which cuts out the middle man and will automate the credit reporting process. Data on Demand will then generate the Metro 2 for you. This is a lite version of the database tools, meaning that if you do have the capability to access the database directly, you will have improved access to data. To get started, check out Intro to Data on Demand.
Where does Credit Reporting Fit?
Credit reporting might deter fraudulent or careless borrowers who might otherwise not repay their loans. But as you build out your credit reporting process, bear in mind that reporting can't do anything to recoup losses if a loan does default.
This Feature is Not
Let's take a second to clear up some possible misconceptions about LMS's Credit Reporting Tool.
- Credit reporting isn't automatic through the Credit Manager method. You'll need manually export data, generate the file and import it into Credit Manager V.
- LoanPro can't guarantee you get approved with any of the credit bureaus. Those organizations have their own policies as to who they approve or deny.
What's Next?
With an understanding of the basics, you're ready to dive in. Check out our Report Credit article for a more detailed walkthrough.
Written by Jackson Stone
Updated on August 22nd, 2024