The National Consumer Assistance Plan (NCAP) encompasses a series of industry-wide initiatives designed to strengthen the quality of credit reports and make the process of dealing with credit information easier and more transparent for customers, while ensuring the data maintained within consumer credit files is accurate and timely.

One component of the NCAP initiatives is the development of enhanced service-level standards that Public Records (PR) data must meet to be reported to a consumer credit file. The enhanced criteria will focus on (1) personally identifiable information (PII) and (2) minimum update frequency for PR data reported. These enhanced PR standards are planned to go into effect on July 1, 2017. Please note that this change affects all three credit bureaus.

In preparation for this change, Equifax has been proactively assessing the potential impact of the NCAP-PR changes, and they have completed the preparations well ahead of the July 1st effective date. In late April, Equifax updated the Bankruptcy Navigator Index (BNI) model to ensure NCAP compliance ahead of schedule, and presents its customers with the option

of a PR data suppressed file or a re-calibrated file. There also was an update to other Equifax scoring models that took place on May 4th. If you would like information disclosing those preparations or how to update your current BNI model, reach out to any member of the RA Business Solutions team and we will be happy to share this information with you.❢

Dear Valued Partners,

The first quarter is in the books and summer will be here in no time. In addition to vacation planning and graduations, it seems what is most on the minds of our business partners is NCAP (National Consumer Assistance Plan).

If you have not heard, NCAP is a joint initiative of the three credit bureaus to strengthen the quality of the credit files and make the process of understanding the information on these files easier for consumers. Without question the most significant development is the decision by all three CRAs to remove civil judgements and tax liens from the credit files that do not meet the necessary identifying information parameters.

This decision will have some level of impact on FICO scoring models as well as proprietary models that deliver scores based on credit data. Please reach out to anyone from our team if you would like more information about what this may mean for you and your business.

Warm regards,

Matthew BoyerVP of Credit Services RA Business Solutions

CreditLine

Quarter 2, 2017

Quarterly Business Newsletter

NCAP Update

It could be a boon for some home buyers — their credit scores will get a surprise boost — but worrisome for mortgage lenders, landlords and others who depend on credit reports to evaluate their potential customers.

In a little-known policy shift, the three national credit bureaus — Equifax, Experian and TransUnion — plan to stop collecting and reporting substantial amounts of civil judgment and tax lien information on public records affecting millions of American consumers starting July 1.

Both types of information have negative impacts on credit scores and remain in credit files for extended periods. Tax liens are levied against properties when the owner is delinquent on payment of taxes. Civil judgments — debts owed by the losing party in legal disputes that typically involve monetary damages — are ordered by courts.

With the elimination of this information from vast numbers of consumer credit files, some lenders are concerned that when they order credit reports to evaluate an applicant, they may no longer get the full picture of the risk of nonpayment posed by the consumer.

David H. Stevens, president and chief executive of the Mortgage Bankers Association, said that if tax lien and civil judgment data is suppressed from credit reports, “it’s unclear whether creditors will be able to make informed decisions” about loan applicants. Stevens said that blocking this information will raise some applicants’ credit scores artificially, creating “false positives” that make individuals appear lower risk than they are.

A study by Vantage Score Solutions, a credit scoring developer created by the three credit bureaus, estimated that 8 percent of consumers would see an average score increase of 10 points on its most widely used scoring model if all civil judgments and tax liens were removed from credit reports. Stevens said 8 percent and 10 points may sound small, but in the mortgage business they equate to significant numbers of applicants.

Terry W. Clemans, executive director of the National Consumer Reporting Association, a group that represents companies that provide credit reports for mortgage lenders, said home buyers “who are on the edge” — they need a score increase to get approved for a loan or obtain a better interest rate — “may be of higher risk than [lenders] are aware after this data is removed.”

Tim Coyle, senior director of real estate and mortgage for LexisNexis Risk Solutions, a large data and technology company that sells creditors data on public records including judgments and tax liens, told me in an interview that an internal study by his firm found that borrowers who have a judgment or a tax lien are 5½ times as likely to end up in serious default or foreclosure as are borrowers who don’t have such items in their files.

The three national credit bureaus have been tight-lipped about the details of their July 1 changes. Mortgage lenders say they have heard nothing from the three bureaus and are in the dark about the possible ramifications. Stevens told me that “nobody” in the mortgage industry “knows about this.”

In response to a request for this column, the bureaus’ national trade organization, the Consumer Data Industry Association, provided a statement indicating that the changes are part of the bureaus’ “National Consumer Assistance Plan” that follows a settlement in 2016 with 31 state attorneys general over alleged problems with credit reporting accuracy and correction of errors on credit reports.

Eric J. Ellman, the group’s interim president, said the bureaus have adopted “enhanced public record data standards for the collection and timely updating of civil judgments and tax liens.” The standards will apply to new and existing data in files and will require that the public records sources include the individual’s name, address and Social Security number or date of birth. Public records sources will also need to be updated on a timely basis to be eligible for inclusion in credit files. Most civil judgment data and up to half of tax lien information cannot currently meet these tests, according to one industry estimate.

Chi Chi Wu, an attorney with the National Consumer Law Center and an expert on credit issues, welcomed the upcoming change. “To the extent that it’s preventing errors” in credit reports, she said — especially situations where a credit file has one consumer confused with another, which Wu says occurs too frequently — “it should be a good thing.”

How much of a good thing it will be for you depends on what’s in your credit files and how lenders adapt to the elimination of what they consider important information — if it’s accurate.Source: Harney, Kenneth R. (2017, March 8). Many Mortgage Applicants Will Get A Surprise Boost in Their Credit Scores. [Web Article]. Retrieved from https://www.washingtonpost.com/realestate/many-mortgage-applicants-will-get-a-surprise-boost-in-their-credit-scores/2017/03/07/b1018620-0347-11e7-b9fa-ed727b644a0b_story.html?utm_term=.b621108fbff9

Many Mortgage Applicants Will Get a Surprise Boost in Their Credit Scores

Challenge: An auto manufacturer and its dealers wanted to drive sales for a luxury model. The plan required identifying and targeting online consumers that matched the economic profile of its current buyers to drive new sales.

Solution: The agency representing the OEM and its dealers consulted with a leading demand side platform (DSP) who suggested using IXI Services Digital Targeting Segments for Auto to inform its online ad campaign.

IXI Targeting Segments powered the campaign to target those online consumers that were likely to have both the desired economic capacity and purchase intent tendencies for the luxury model. These segments included:

• Income greater than $250,000 (found via IXI’s Income360®product)

• Discretionary Spending over $100,000

• Consumers In-market for an Auto Lease

When a campaign is driven through ad exchanges deploying real-time bidding technology, these types of segments can be used to trigger bids, helping ensure advertisers eliminate wasted spend on unqualified consumers. The targeting occurs in real-time — seamlessly and without disturbing the user’s browsing experience.

The financial measures underlying these targeting segments are from a variety of data sources, including proprietary IXI wealth insights and aggregated Equifax credit information – anonymous data that are ZIP+4 specific. This gives advertisers the ability to target certain types of audience, without the use of any personally identifiable information.

Results: After the campaign’s completion, a third-party evaluation of auto purchases found that of the 16 online audience segments tested, IXI’s data proved to be the best at predicting households that would ultimately purchase the automobile or a vehicle in the same class.

Although this study is auto specific, IXI solutions can be used for a variety of industries. As the market continues to remain unsteady and consumers’ financial positions are the weakest they have been in decades, firms are facing more challenges than ever before.

IXI understands these challenges and is working with clients to help improve strategies, rebuild balance sheets, grow assets under management, reconnect with the most valuable customers, and find new customers that are likely to have the capacity to invest and purchase products and services.

Contact your Account Executive to see how an IXI solution can benefit you and your business!Source: Equifax IXI Services. (2016, July 9). Case Study – The Power of Economic Segmentation. A Guide To Better Digital Advertising Through Data. [Web Article]. Retrieved from http://resources.ixicorp.com/digital-marketing/digital-marketing-best-practices

Ray Mattes President/CEO Retail Alliance(757) 455-9321rmattes@retailalliance.com

Matt BoyerVice President(757) 455-9326mboyer@retailalliance.com

Amy CardonaAccount Executive(757) 455-9387acardona@retailalliance.com

Chris ResendezAccount Executive(757) 455-9309cresendez@retailalliance.com

Briana CarterSales Support & Mktg Coordinator(757) 455-9343bcarter@retailalliance.com

Your Retail Alliance Business Solutions Team

The Power of Economic Segmentation: an Equifax IXI Case Study

US Economic and Credit Trends Outlook Quarterly WebinarsMark your calendar now to attend the upcoming quarterly U.S. Economic and Credit Trends Outlook webinars from Equifax. The webinars are scheduled for the following dates:

Q2 2017: May 25, 2017 | 1:00pm ETQ3 2017: August 22, 2017 |1:00pm ETQ4 2017: November 16, 2017 |1:00pm ET

838 Granby StreetNorfolk, VA 23510 (757) 466 1600 ph(757) 466 9363 fax888-757-5265 toll freewww.rabizsol.com

Quarter 2, 2017 RA Business Solutions Newsletter

“How to Read a Credit Report” 2017 Schedule

Richmond Area 10:30AM-12:00PM

• July 12 • October 18

Location: Richmond Public Library 101 E Franklin St, Richmond, VA 23219

Seating is limited to 30 guests.

Hampton Roads Area 9:00AM-10:30AM

• May 17 • August 16 • November 15

Location: Retail Alliance838 Granby St, Norfolk, VA 23510

Seating is limited to 20 guests.

To accommodate larger groups, we can bring the seminar to your workplace at your convenience.

Curious to see what we have up our sleeves? Keep up with the latest industry trends, highlights from Equifax, and important business insights that can benefit your business or you personally. Search RA Business Solutions and follow us on LinkedIn and Facebook! We’d love to have you as a part of our network!

FREE TRAINING!! JOIN OUR NETWORK

Register to Briana CarterEmail: bcarter@retailalliance.com

Ph: (757) 455-9343

Connect with us!