Positive and negative debt

Credit reporting agencies reference credit reporting as falling into the categories of positive and negative debt reporting:

Positive-debt reporting involves the reporting of debt by the original creditor, which is current for a consumer or business. An important component of this is the payment history, which helps to identify if a consumer or business has remained current on their payments. This debt normally displays in the Trade Lines section of credit reports. When an account becomes delinquent or is turned over to collections, the debt usually remains reflected in the Trade Line section with an indication that it has been charged off or turned over to collections.

Negative-debt reporting involves the reporting of debt only after it has been written off by the original creditor. This type of reporting focuses on the current state of delinquent debt, which has often been turned over to collection agencies. This debt normally displays in the Collections section of credit reports.

Currently The Collector System only supports reporting to the credit reporting agencies in the negative-debt context.

Consumer and business debt

Reporting consumer debt involves reporting accounts that have one or more consumers responsible for the debt. All of the credit reporting agencies that support the Metro 2 format accept the reporting of consumer debt, and they all provide the ability for collection agencies to submit only negative-debt information.

Reporting business debt involves reporting accounts that have one or more businesses responsible for them. As of The Collector System 2010, only Experian supports the submission of negative-debt information for business customers. The information is submitted to them using the Metro 2 format, which they convert to their proprietary business format.

You can submit a single file to Experian that contains both consumer and business debt. Experian asks that you make them aware if you submit data in this manner since their consumer division processes the file first, and then passes it along to their commercial division. Neglecting to inform them would likely cause the file to fail processing, as the ECOA code used for commercial debt (W – Commercial/Business) is not valid for processing by the consumer division (essentially, the consumer processing needs to be set up to ignore the business ECOA codes). For a list of the ECOA codes, see Equal Credit Opportunity Act (ECOA) codes.

Explicit reporting methodology

The Collector System submits accounts for reporting to credit reporting agencies using a convention of explicit requesting. In other words, accounts are never implicitly reported by The Collector System to the credit reporting agencies.It's important to understand that reporting accounts to credit reporting agencies is not a default behavior of The Collector System. You must explicitly set up The Collector System to report accounts. This aligns with the behavior of other data services, such as submitting a letter or requesting a data vendor report.

Metro 2 credit reporting format

The Metro 2 credit reporting format is a data specification created by the Consumer Data Industry Association (CDIA) for credit reporting entities who report consumers' credit history information to major credit reporting agencies in a standardized format. It is designed to standardize a wide range of credit history information while complying with state and federal laws and regulations (such as accommodating consumer disputes and disputed status of information).

The Metro 2 format was also created to replace the older Metro format. The Metro 2 format has broader reporting capabilities and is the only format accepted today by the major credit reporting agencies: Experian, Equifax, TRW, and Innovis.

Using the Metro 2 format, you can:

  • Manage the date of first delinquency effectively.
  • Manage creditor classification effectively.
  • Add various comment codes to document special circumstances.
  • Report accounts based on status.

The Metro 2 format includes the following features and functionality:

  • Active accounts status code
  • Paid-in-full status code
  • Cancellation status code
  • Skip tracing
  • Bankruptcy
  • Account type identifier
  • Account status statistics
  • Creditor classification