In the credit and lending space, exhausting data about a client’s fundability is crucial. In this final installment of Into the Madness, host Merrill Chandler deep dives into credit profile, consumer disclosure, and myFICO. He takes us through the details of an Experian consumer disclosure and how it records all the salient information that is used in a 24-month lookback period and evaluated by FICO and by lender software. He also notes the importance of the synchronization between all three credit bureaus – namely, Experian, TransUnion, and Equifax – to suss out the truth and send in our accuracy audits.
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Into The Madness Part 5: How To Get Bigger Approvals With Your Experian Data
This is the final installment of the Into the Madness deep dive credit profile, consumer disclosure, myFICO episode. We’re going to be taking an in-depth look at your Experian consumer disclosure and how it records all the salient information that’s used in your 24-month lookback period and is evaluated by FICO and by lender software. Let’s take a look at the Experian consumer disclosure. Remember I’ve had to redact all the information and delete things. What we want to look at first is consumer disclosures are the raw data files that Congress mandated the three credit bureaus send to us, disclosing all the information that they report to creditors, lenders and other persons or businesses of interest who are looking to pull our credit.
This is the raw data. If it’s in here, it’s being used by lender software, FICO software to evaluate your fundability. We’ve created a neutered version of the Experian, but I’m going to point it out where it says prepared for, you’ll find your name. There’s the date that it was generated, but there’s the report number. Especially if you’re going to do an accuracy audit with the credit bureaus, if you’re going to dispute anything, you need to use the report number for the areas that you believe that there are inaccuracies, that it’s erroneous or that it’s unverifiable.
Your Personal Consumer Disclosure From Experian
It gives you a general review of how many accounts, public records, but where we want to know the truth. I want you to look at your personal consumer disclosure from Experian. Find out how many names are listed, how many addresses are listed, employers. As we go through this, notice in the name section, there are three. One of them is the first, middle initial and last. The second one is just the first and last. The third one is the first, full middle name and last. Those are going to create too much variance in automatic underwriting software.
We want this to have one name. Ultimately, we want one address. Notice all sixteen of these addresses. What I’d like you to notice is that there’s no correlation in the credit reports within the credit reports. I want to show you that Experian is the only one who assigns this version of the name, 28925. That name ID means that there are certain accounts below in the account section that were applied under the first, middle initial and last. This name ID was established first and last. That name ID is associated with the first and last. The first, middle and last are associated with this 10765. Those are different name IDs, underwriting software. More importantly, the LexisNexis and the FICO Falcon fraud system, all connect the names with the institutions or the inquiries that originally generated that name or where you use your name.
As I’ve said in previous episodes of Into the Madness, you need to be aware that they record the name that’s on the application when you put in a new inquiry, when you’re applying for a credit instrument or applying for funding. It’s not what the name gets approved. If you put in thirteen applications with thirteen versions of your name, the databases are going to capture all thirteen versions of that name depending on who they pulled on the inquiry. If they only pull TransUnion, it is going to capture all thirteen of those. If they pull all three bureaus, all thirteen of those inquiries are going to end up on the consumer disclosures. That’s why we’ve got to check all of this out.It is easier to get to subsequent files when you know what you are looking for and know the relationship between data #GetFundable Click To Tweet
Under addresses, we have sixteen. Notice that it also has an address ID. That means that the different applications and whichever ones got approved, those applications or approvals are associated with the version of your address that you applied under and under which the name that you are approved. This makes your accuracy audits more complicated, but it also facilitates being able to clean up and synchronize your data files. If you have an address that’s associated with an erroneous, you never lived at your parents’ when you’re an adult, you never lived in when you’re at college. If they have addresses associated with different accounts, it’s easier to synchronize and audit those particular addresses and accounts. You could send that audit to the bureaus to have them reconcile and/or delete the negative addresses or accounts.
Our End Game
That’s what you learned in the bootcamp. GetFundableBootcamp.com tells you everything you need to know so that you can create. Even if it takes us a little bit of time to get there, our end game is one version of your name, one version of your address, two employers if you are implementing the qualified fundable entity process that you may have learned in the bootcamp. You only need one employer’s name there if you’re not seeking business funding and you just want to optimize the fundability of your personal borrower profile.
That’s our end game, one address, one year of birth. Be sure and check your year of birth. If you have a 2 or 3 there, you may have adopted from a co-borrower or from a junior-senior or someone with a similar name. You may end up with multiple versions of the date of birth. You’ve got to know that so that in your accuracy audit, you send that to the bureaus and say, “This is my date of birth. You’ve got to get rid of the ones that are not me,” that mistaken year of birth. The phone numbers are the same as we’ve discussed in both Equifax and TransUnion.
It says that there are two phone numbers on file. We want one number. Go to the episode where we talk about building a powerful personal borrower identity. In this case, you’ll want one number so that this data set is perfect and all the databases have the same data set. That way when you file an application using that perfect data set, they know who you are. That’s the first hurdle. The first stage of funding is the automatic underwriting system needs to know that they know exactly who they’re lending to. When you have a whole bunch of these, it’s going to end up being a mess.
Look at the employers. One of them is misspelled, but now you have a duplicate. It’s saying that there are two versions of this in your accuracy audit with the bureaus. You’ve got to make sure that your information is perfect because CreditSense is one word, but it’s an S. This is spelled correctly but uses it as one word. This individual also shows that there previously had a gap. Remember, we want to show a professional borrower profile. Our end game is to have one employer if you’re just trying to optimize for personal. If you’re interested in the future of implementing a qualified fundable entity strategy, you’re going to end up having that qualified fundable entity as the second employer.
We only want two if you’re working the business funding side of your fundability process. These have to be audited and that audit sent to the bureaus to ensure that they reconcile the truth of your identity. It’s the same person, so we’re going to look at similar details formatted differently for Equifax. Notice potentially negative accounts. They’re not saying it’s negative, even though it says that the account was charged off. Potentially negative, I don’t know why they don’t say this is an adverse account or this is a negative account. This is a derogatory listing. It’s charged off, written off.
Look at their legend. Their legend is okay which is current on payments. This doesn’t calculate whether or not you paid on the day before the due date or day after the due date. If it shows current on payments, that means you’re not 30 days past due. I’m going to show you the documentation where they’re calculated. They’re listing the day that you paid compared to when it’s due, just like on TransUnion and Equifax. Instead of using colors, they’re simply providing you the nomenclature 30, 60, 90, 120, 150, 180, and charge off.
Notice in 2015, 2019, 2018, for the twelve months, it was in the charged-off mode for quite a while. Historical first reported in 2015 the contact information to rectify this. Notice again, like the other two bureaus. Here’s the balance, the scheduled payment and how much was paid. That’s what they’re reconciling. They’re saying when was the status updated or the most recent payment. Let’s look at a positive payment. What you want to look for is positive payments as well. They’re going to say when was the balance updated and how much was the recent payment, what’s the actual payment? If it’s derogatory, then Experian tells you how long it’s going to stay on your credit report as a negative or derogatory account. We have to look at this math to see what’s true, but the balance updated, again, notice how all three bureaus do it differently.
Balance updated very well may be your reporting date. You use this data and then you call your creditor, Bank of America and say, “When is this account reported?” It’s most effective to do it on open positive accounts as we’ve discussed previously. They update this balance. Bank of America has this account on its books as a charge off. They continue to report this as a charge off every single month. Those are the things that we need to watch for. Be aware. This may be the date that it’s reported. We do not know. That’s why you’re going to ask. Let’s go to what a collection account looks like. Here’s the account name, Enhance Recovery. It doesn’t say it’s a collection. There’s the first creditor. It doesn’t say anywhere on here the relationship or how long it was at, in this case, DirecTV before it got sent to collections.
The person who owns the paper now, whether it was purchased. We’re going to be covering a section on the degradation of an account. We’re going to show how it goes late, then it goes to the collection and then goes to either judgment or bankruptcy. We’re going to walk through the entire process of how accounts at each stage, what is it that we need to do? At each stage, how do we work with the data that’s being reported? Ally Financial, here’s a positive account. It’s an auto loan. It’s joint and open/never late. The current balance and this changes monthly, balance updated.
We need to find out if that is the reporting date. You’re going to verify it as many times as you must in order to get the same answer three times. If two other people say 3/29 is the date that is reported, we will count this as the reporting date. When the CreditSense team does it for ballet clients and things like that, when the adviser team goes in, they count it until three times. They don’t even take this into account because we want to make sure that is reconciled. Historical Information, the scheduled payment was $520, $500 was paid, $520 was paid, $550 was paid.Data must be audited and reconciled at the credit bureau level because that's what every credit report in the universe is going to ping and pull down. If you've got a mess up there, your limits are going to be lower or you're going to get flat… Click To Tweet
It’s paid on 12/24, 1/24 and 2/24. You will know when the payment was made and how much was made in comparison. We want to make sure that we build our payment models inside of your fundability to account for that. We always say both on installment loans and on revolving accounts never pay the minimum payment. We always want to pay a little bit more.
Credit Profile Synchronization
These are more of the same. You may have twenty accounts. You may have five accounts. Remember, you’re going to be comparing these three across your monitor. You’re going to be showing Experian, TransUnion, Equifax, and you want to synchronize.
That’s why we call it a Credit Profile Synchronization. We want to synchronize between all three bureaus to suss out what is the truth and send in our accuracy audits to the credit bureaus and outline that these are not accurate, these are not true and I don’t believe these can be verified. Here are the inquiries. The contact information, auto loan, this is an extension of credit. There’s plenty of information available here. A soft inquiry, this individual holds the Experian report and sometimes the CIC, the means to get it through the process was through AnnualCreditReport.com. There are two different things here, but they’re soft inquiries so they don’t count. It’s still on 4/12 and 4/11.
That usually means that you can go to Experian directly and pull an inquiry or you can go through the consumer information center so they can track who went to AnnualCreditReport.com. Notice that you’ll find out if you’ve been bingeing these, if you’re a myFICO credit report subscriber, you may well have these as well. MyFICO is checking a soft inquiry every single month that you are subscribed to. They’re checking it to make sure where you are. When we have the myFICO credit report, sometimes we’re getting free daily updates. They’re checking against the bureau data for updates. Those are soft inquiries.
These are the ones where LexisNexis, and take a look at all the different ways in which these soft inquiries because some are promotional, some are doing a deeper dive. Some are seeing how well you’re doing against all your other accounts. That is a soft inquiry, but it’s extremely dangerous. It doesn’t lower your score or lower your fundability. If Chase is pinging your profile to see how you’re paying all your other bills, vital information. You can’t dispute these because they’re meaningless on your credit profile. It is telling you who is looking at you. Like LexisNexis Insurance, property and casualty insurance, they may have gone somewhere and somebody did a soft pull about their insurance practices.
Creating A Bulletproof Identity
Here are your contact information and important messages. Notice how easy it is to get through each subsequent file once we know what they’re looking for, once we know what they’re reporting, once we know the relationship between all the data. I’ve gone through some of these may appear very simple. You may have 30-page, 60-page reports with gobs of information. The sections are still true for you. You need to go through and you’ll know that you’re going to try and synchronize your data points. You want to synchronize your identity. You want to create a bulletproof identity.
The first place to do that is you update your positive creditors with your chosen PBID, your Personal Borrow Identity. When do you come to the Experian, TransUnion, Equifax consumer disclosures, only then do you do your accuracy audit and find out where the problems are, and which versions of your name and address are not on your government issued ID. Anything that’s not on your government issued ID belongs in your accuracy audit. You want to make sure that you drive the credit bureau to expand or to contract all of their reporting to one version of your identity.
The only thing that’s going to make sense to them is when you change your creditors, then the accuracy audit and the letters to the bureaus about reconciling those disputing erroneous or inaccurate data. Those only make sense after your positive creditors are reporting your positive PBID. That was five episodes to make sure that, A, you know what tools you have and B, most importantly, you know how to use those tools. The five episodes are myFICO credit report, how to order your three consumer disclosure files, one from each of the bureaus, and Equifax, TransUnion, and Experian reviews of each one of those.
That’s five installments of the Into the Madness series. There are four tools, your myFICO filters and scores the data. The data must be audited and reconciled at the credit bureau level because that’s what every credit report in the universe is going to ping and pull down. If you’ve got a mess up there, your limits are going to be lower or you’re going to get flat out denied because they don’t know who. When I say who, the automatic underwriting software does not know who they’re lending to. If they do, you’re all set. Even when we get out in the weeds with all the technical tech Winnie stuff, you’re talking data points and I’m showing you where to find them and how to make sure that they support your fundability. Godspeed and God bless.
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