Update - Commercial Credit Reporting Guidelines

4/22/2020
Commercial Credit

Commercial Credit Reporting During Times of Natural or Declared Disasters

 

There are two reporting options:

 

  1. Maintain Existing “AS IS” reporting. Report the actual Balance, Total Past Due Amount, Aging Categories or Payment Rating. In addition, if you have the ability, report the Other field as value 020 Business Affected by Natural or Declared Disaster. Allow the account to age if payment is not made in subsequent reporting periods.
  2. Modified Reporting with Accommodations. If you have the ability, report the Other field as value 019 Deferred Payment and Account Comment 2 as value 020 Business Affected by Natural or Declared Disaster.

Report the following data fields as specified:

 

Current/Non Derogatory Accounts:

o    Report all existing account elements, Date Opened, Credit Limits, Account Type, etc. 

o    Frequency of Repayment set to O = Other

o    Scheduled Payment Amount set to = $0 

o    Current Balance = the total amount borrowed minus any payments which have been made. 

o    Amount Past Due set to = $0

o    Mark all Past Due Aging Categories set to = $0

o    If Reporting a Payment Rating is supplied then set to 0 meaning Current Account

o    If payments are made during this time of deferred payment arrangements time then update the Balance accordingly. 

o    Continue to report the adjusted account elements until the deferred payment arrangements have been removed. 

Derogatory Accounts – defined as an account having a Total Past Due Amount > $0 or Any Past Due Aging Category field with Amount(s) > $0 or marked as Collection or Payment Rating > 0.  

o    If the account was delinquent before the natural disaster, then maintain reporting the delinquent status and Balance and Past Due Aging Amounts as of the time of the disaster until the deferred payment arrangements have been removed. Reporting Account Comment Code 020 is also recommended.

Charged-Off Accounts - continue reporting the actual Account Balance and Total Past Due Amount, Past Due Aging Categories and Charge-off fields.

Frequently Asked Questions

 

Q: Will Equifax modify a commercial contributor’s data to reflect reporting accommodations or to mark as “Affected by Disaster”? 

No, it is Equifax policy to NOT modify contributors' reporting files to reflect such changes. The contributor acting as the source of the data should report accounts according to their internal policies.   

 

Q: How does NOT reporting impact Equifax Commercial scores and products?

In general, scores and products may be impacted if contributors stop reporting accounts.

 

Please reach out to the Data Contributor Services team at 888-407-0359, Option 4, Option 2 to learn more about the impact of reporting and credit scores during times of natural or declared disasters.

 

Q: Who/how to contact Equifax about reporting formatting questions?

Equifax customers may reach out to your Contributor Services Business Consultant for reporting questions. If you don’t know your consultant, please contact our Data Contributor Services team at 888-407-0359, Option 4, Option 2.

 

Q: Does the comment code have any effect on commercial scoring?

No, the comment code alone is informational, placing a note on the commercial credit report to provide additional context. The comment code by itself does not factor into any commercial score calculation. Derogatory Accounts (as defined above) will still be negatively impacted by reported delinquency even if a comment code is also reported.

 

Q: What regulatory reporting rules were used?  

Commercial accounts have different reporting formats and valid values.  Currently commercial reporting does not fall under the guidelines supplied by the Consumer Financial Protection Bureau. The Equifax Commercial database utilizes some of the reporting guidelines used in the consumer credit reporting market where appropriate. The proposed commercial reporting guidelines do consider guidance from the recently enacted CARES Act, section 4021 amending the Fair Credit Reporting Act.    

 

Q: How long should reporting modifications last for?

Based on the CARES Act, modifications to reporting accommodations began on January 31, 2020 and will last for 120 days after the national emergency declared by the President is terminated.  

 

excerpts from CARES Act 623(a)

‘‘(II) COVERED PERIOD.—The term ‘covered period’ means the period beginning on January 31, 2020 and ending on the later of—

(aa) 120 days after the date of enactment of this subparagraph; or

(bb) 120 days after the date on which the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act

(50 U.S.C. 1601 et seq.) terminates.”

 

Q: Is there SBA Loan Forgiveness?

Currently there is no commercial Account Comment Code to label an SBA loan as “forgiven”. If SBA forgives the loan then reporting the loan with a Balance = $0 and Total Past Due = $0 will report the loan as paid as agreed.    

 

Q: Can a commercial account be reported in loan forbearance?

Currently there is no commercial Account Comment Code to label an account in “forbearance”. Option 2, Modified Reporting with Accommodations, of the reporting guidelines above and freezing the reporting of the Balance and Aging will report the account in a similar manner.

 

Q: What is a Payment holiday?

There appears to be multiple terms for minimizing the negative impact to accounts during the economic downturn caused by COVID-19. Option 2 of the reporting guidelines above and freezing the reporting of the Balance and Aging will report the account in a similar manner. This may minimize negative impacts to commercial credit scores.  

 

Q: Can I correct previously reported accounts if reporting adjustments are needed?

Yes, please contact your Commercial Contributor Services Business Analyst if you need to correct accounts. You may reach this individual at 888-407-0359, Option 4, Option 2. This should be via an automated reporting file or a replacement file. If you need to make mass corrections you will need to inform your Business Analyst to ensure proper coding and loading of the correction file to our commercial database.

 

Q: For how long should Account Comment Code(s) 020 or 021 be reported for?

This is an individual contributor decision based on internal policy. Pursuant to the CARES Act, this would be a period of approximately 120 days from when the President terminates the COVID-19 national emergency.

 

Q: How do I report Account Comment Codes?

Continue to populate a commercial Account Comment Code for the length of time you want the account to be marked in the manner. If the Account Comment Code is left blank the Comment Code will be removed from our Equifax commercial credit reports.  

 

Q: I source my commercial data from a Metro 2 file, how do I report Affected by Disaster Codes?

Please reference the Metro 2® Credit Reporting Resource Guide for specific instructions. The code available is a Special Comment Code of AW - Affected by natural or declared disaster. This code if used will populate a similar termed code and will display on a Equifax commercial credit report.