Ever wonder what Metro2 means? Don‘t know the difference between TransUnion and Equifax? Clueless of what e-OSCAR is? Confused yourself between FICO, FCRA, ECOA, FFELP and even OCBOA? Well then keep on reading to discover the world of metro 2 compliance...
Table of contents:
1. The Creation of the Metro2 Language & Software1. The Creation of the Metro2 Language & Software 2. Credit Repair Isn't A Magic Bullet2. Credit Repair Isn't A Magic Bullet 3. Credit Bureau Compliance Codes3. Credit Bureau Compliance Codes 4. What is e-OSCAR4. What is e-OSCAR 5. What's A Template Letter5. What's A Template Letter 6. Conclusion6. Conclusion
The Creation of the Metro2 Language & Software
The METRO2 language and software system was designed to give companies a universal language and standard of reporting that all financial institutions must use when sending their customers’ data to the three credit bureaus. This will enable banks to comply with the Fair Credit Reporting Act (FCRA) and the Equal Credit Opportunity Act (ECOA). The FCRA is a federal law that protects consumers from inaccurate credit reporting. It also promotes accuracy and privacy of the reports in order to maintain fair lending practices. The ECOA aims to ensure equal opportunities for all parties involved in the credit process, including applicants, creditors and collection agencies. The Metro 2 standards for reporting an account established by the credit bureaus is surprisingly higher than the standard established by politicians in consumer protection laws, meaning that it is possible for an account to meet the minimal reporting requirements set forth by the Federal Trade Commission or Fair Debt Collection Practices Act but not actually meet the standard of reporting the bureaus have set for themselves.
Credit Repair Isn't a Magic Bullet
While credit repair isn't a magic bullet, it's an essential part of financial health. If you've been in the credit repair space for any amount of time, then you're probably at least minimally familiar with the consumer protection laws like the Fair Credit Reporting Act, the Fair Credit Billing Act, Equal Opportunity Credit Act and the Fair Debt Collection Practices Act. These laws were created by politicians who aren't familiar with the credit reporting industry—and that makes them far from perfect for your business or for consumers. The laws are designed to protect consumers from credit bureaus, but many of them don't take into account the needs of businesses. In fact, some business owners have found that the laws can actually make it more difficult for them to operate.
Hence why credit repair specialists need to stay well versed on these consumer protection laws—and how they affect your business.
Credit Bureau Compliance Codes
Credit Bureau compliance codes are user-entered and displayed in the credit repositories' reports. The codes notify the credit repositories of disputes, charge-offs, or other factors that better clarify the information being reported. It also allows a way of indicating if an account was closed due to a dispute. File maintenance to this field writes to loan history. These codes are often used in conjunction with an account status code to identify a specific reason or event that can be identified with the account. The codes can be used to identify a specific reason or event that can be identified with the account. For example, if an account was closed due to a dispute, the credit repository should use these codes in conjunction with the account status code to indicate that this is what happened.
What is e-OSCAR?
e-OSCAR stands for “Online Solution for Complete and Accurate Reporting.” This program was created by the big three credit bureaus—Equifax, Experian, and TransUnion—in 1993. With the recent addition of Innovis as a major credit reporting agency, e-OSCAR is now owned and used by all four credit bureaus (the fourth one being Innovis).
e-OSCAR was made to be an automated credit dispute system which would aim to reduce the amount of time and manpower needed to process consumers' claims of mistakes on their credit reports. Through this, the e-OSCAR system reads Metro2 code format and uses a specialized software to interpret and process the data into a format that is easily readable by consumers. Example: you see a 30 day late payment on your credit report as a consumer, however e-OSCAR will see it as code 71 (Account 30 – 59 days past the due date).
What's a Template Letter (609 Letter)?
The 609 letter is just another method of gathering information and seeking verification of the accuracy of the credit report. If disputes are successful, the credit bureaus may remove the negative item. However, the 609 letter is no longer effective as it is old & outdated! You can even download these letters online for free... Just think, most credit repair companies still use this old method of fighting credit report disputes. They will even charge you for this outdated service. The credit bureaus are well aware that the 609 letter is outdated and no longer works. In fact, they even include a statement in their reports stating that consumers should not use this method to dispute inaccurate information because it won't be considered. However, many companies still use this old method of disputing credit report errors which can actually hurt your credit repair efforts. Just think, this is only the 609 letter! There are plenty more than that, you can read our article on template letters here
Metro2 is a complex language that involves lots of practice & learning, hence why most credit repair companies use template letter disputing. As a consumer, you should beware of companies that say they can remove/delete items off your report in 30 days or less. As this is not only illegal for them to say, yet it is completely wrong!