What Is the Metro 2 Format, And How Does It Impact Credit Reporting?
September 25, 2008
Metro 2 is a credit reporting software system, and it is important to understand it so you know what goes on behind the scene of your credit report.
Businesses in the collection and credit industries who report consumer credit histories to the four credit report agencies must use the Metro 2 credit format. It was originally created in 1997 by the Consumer Data Industry Association (CDIA).
Metro 2 is designed to meet all the requirements of the Fair Credit Reporting Act (FCRA), the Fair Credit Billing Act (FBCA), the Equal Credit Opportunity Act (ECOA) and the Fair Debt Collections Practices Act (FDCPA).
Metro 2 provides a standard format to report all consumer information. The software performs validity checks on the accounts, insuring that the information entered is accurate, complete and compliant. It allows the collection or credit business to report information on consumers that cannot be located. Metro 2 makes provisions for the reporting of deferred payments and the transfer or sale of debt.
Metro 2 format software can be catered to specific industries and used by a business that has more than one industry. Businesses in the credit and collection industry must have their Metro 2 software tested and approved by each of the credit agencies that they report to. Accounts are submitted on a monthly basis and it is important that the software be kept up to date.
A third party consumer and business credit reporting service may be used by many businesses that carry accounts, such as jewelry stores or auto dealers. The credit reporting service will use Metro 2 to process the data into the correct format before submitting it to the credit report agency for the smaller business.
It’s important to remember that Metro 2 reduces everything to a 2-digit code. If you have a dispute with anything on your credit report, the entire letter you send in support of that dispute is reduced to 2 digits. If those digits are improperly entered then your dispute will be incorrect. Say a lot in your dispute, plead your case, offer proof . . . it all comes down to 2 digits.
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