Credit Bureau Services are key to supporting the challenges businesses face in the digital age. Ensuring that the enormous amounts of credit bureau information they have access to is accurate, clean, insightful and secure is not easy.

As a leading credit bureau of South Africa, consumer and commercial data is Compuscan’s core competency. We provide clients with access to this information to support their everyday customer and business requirements across a wide spectrum of industries.

Compuscan makes use of powerful, accurate, comprehensive, up-to-date credit bureau information on consumers and businesses to improve clients’ business decisions and mitigate risks using verification services, prediction solutions and professional insights.

As required in terms of the National Credit Act, Compuscan is registered with the National Credit Regulator (NCR), the body that controls the registration of all credit bureaus, banks, microlenders, retailers and any other businesses that make credit available to consumers or which charge interest on overdue accounts.

Find out how bureaus use credit bureau information in Compuscan’s credit bureau services guide.

What are the functions of the credit bureau services in South Africa

Credit bureaus collect personal and payment information and keep records of the way consumers manage their credit profiles. They play an important role in the promotion of a fair and transparent credit market and prevention of reckless lending.

Credit bureaus track how individuals, companies and other juristic entities like trusts pay their accounts and manage their debt. They use credit bureau information to generate credit reports, credit scores and related information that assist credit providers in managing risk and making credit decisions.

The benefits of using credit bureau information include:

  • Access to the best possible credit bureau information for making better credit decisions.
  • Lenders can identify good borrowers, which lowers credit risk to lenders.
  • Lenders manage customers and increase the amounts they can lend.
  • Debt collections and debt recovery on overdue or adverse accounts is improved.
  • Reduction credit risk and of fraud by providing accurate information for verification.
  • Simple and quick vetting of applicants for credit.
  • Borrowers are able to develop credit profiles and improve their chances of obtaining loans.

Credit bureau information helps to prevent information asymmetry, such as:

  • Adverse selection, which describes an undesired result in the case where one party to a deal has more accurate and different information to the other party. The party with less information is at a disadvantage compared to the party with more information, and the party lacking relevant information could make decisions that cause it to suffer adverse effects.

An example in the insurance industry, for instance, would be where an insurance company extends insurance coverage to an applicant whose actual risk is substantially higher than the risk known to the insurance company. The insurer suffers adverse effects by offering coverage at a premium that does not accurately reflect its actual risk exposure.

  • Moral hazard, where one party to an agreement engages in risky behaviour or fails to act in good faith because it knows the other party bears the consequences of that behaviour. For example, a motorist with a vehicle insurance policy that provides full coverage and no upfront excess payment, may exercise less care while driving than someone with no insurance or a less comprehensive policy. This is because the first motorist knows the insurance company would cover 100% of the costs if he has an accident, whereas the second motorist would be 100% responsible for any costs resulting from an accident.

Credit scores, credit reports and credit risk

Credit bureau information is not only for use by companies, but also appears on individual credit reports. Consumers can access credit bureau information to retrieve their credit scores and know their credit status. Consumers are able to verify that their listed details are correct, and if not, can dispute the information. Disputes could for example be filed if the credit bureau incorrectly lists accounts opened in their names, invalid judgments against them or debts that may have prescribed.

Credit scores are based on a consumer’s credit bureau information, which is contained in their credit reports. These scores are an indication of consumer risk. To better manage credit risk, subscribers to credit bureau information use credit scores to aid in their decision-making process. While credit bureau information is used to generate these scores, different subscribers may look at different aspects of this information to calculate a score that best reflects their business and lending needs.

Understanding how credit scores can help credit risk management and debt collections is integral for any lender.

Compuscan’s Credit Bureau Services throughout the Credit Life Cycle

Compuscan is the leading provider of data-driven customer growth solutions across all phases of the credit life cycle, with insights born of years of experience in customer data management. Accumulated experience includes: consumer and commercial credit bureaus; credit scoring technologies; specialised marketing, education, information science and loyalty and rewards solutions.

In particular, Compuscan has deep knowledge across the following sectors: banking, micro finance, insurance, utilities, automotive, telecommunications, mortgage, real estate, retail, trade and small business. Its multidisciplinary approach of academic, industry- and experience-based knowledge of credit life cycle strategies ensures world class solutions to a wide range of business challenges – from generating leads to customer acquisition and management, as well as credit risk prediction and management, debt collection and debt recovery.

Compuscan’s five business units – Credit Bureau Services, Decision Analytics, Marketing Services, Loyalty and Rewards and Compuscan Academy – work together to provide world class solutions making use of the credit bureau information and applying a variety of models and algorithms to produce actionable insights or provide supporting services to clients.

  • The Credit Bureau Services unit provides the credit bureau information, insights and solutions to mitigate risk and increase profits for consumer- and commercial-facing businesses.
  • The Decision Analytics unit, powered by Scoresharp, offers data, analytics, modelling and software, enabling businesses to make better decisions and more accurately predict consumer behaviour.
  • The Marketing Services unit provides data enrichment, segmentation information and a complete consumer overview to help businesses develop and execute targeted marketing strategies.
  • The Loyalty and Rewards unit has expert consultants developing programmes, CRM solutions and campaigns supported by data and analytics. Services include creation of vouchers, sharing and using vouchers, digital customer engagement, rewards analytics and consultancy.
  • Compuscan Academy offers a diverse range of training progammes and learnerships for professionals and companies in the credit and financial services industries. Specialist topics include legal compliance, credit and credit risk management, customer management, business and leadership skills, credit and microfinance skills, debt counselling, debt collections and debt recovery. While this business unit doesn’t make use of credit bureau information, it uses industry expertise to educate those working in the credit and financial environments.

Compuscan Credit Bureau Services Guide details how credit bureau information can help your business.

Prospecting for customers

Compuscan’s Marketing Services unit provides the tools for accurately determining prospects and generating new leads – the lifeblood of any business.

Prospecting is the process of finding leads and turning them into prospects for the salespeople in the business to follow up on.

Leads are potential clients or customer have not yet been qualified as a prospect. In the sales process, businesses gather leads first and then qualify them as prospects, before contacting them with a view to selling their services or products to them.

Prospects are potential customers that meet certain criteria. Prospects generally fit a business’s target market, can afford to buy and are authorised to make buying decisions. They don’t need to have indicated an interest in buying – they just need to meet the criteria.

Assessing the credit risk of prospects is one way that lenders can use bureau data in the prospecting phase. Knowing the credit risk of a potential customer before marketing to them can help prevent the need for debt collection or debt recovery. Attracting lower risk customers would be beneficial to a businesses credit risk management process.

Using business’ proprietary data and bureau data, Compuscan is able to generate the criteria for a company’s marketing campaign. Using these criteria, leads can be generated. These can be marketed to, and eventually qualified as prospects.

This often involves a process called segmentation, which is the division of a population into segments according to age, gender, income, credit profile, risk profile, and other criteria depending on the company’s needs. Segmentation enables Compuscan’s clients to accurately target potential customers.

Credit bureau services and information isn’t limited to lenders; but can be used in marketing and other industries as well.

Customer acquisition using credit bureau services

Before signing up applicants for credit, businesses need to carry out extensive credit risk management checks to evaluate consumer creditworthiness, credit profiles and credit scores in order to ensure they are not at risk of fraud or potential defaulting customers. Using Compuscan’s data access channels, lenders can seamlessly onboard new customers, enhance business decision-making, manage diverse portfolios and optimise work streams.

  • Credit scores are based on positive and negative credit bureau information contained in credit profiles of individual and business consumers. They indicate to lenders how likely consumers are to honour their credit commitments in the future. Credit scores may differ from one bureau to the next due to different ways credit bureaus calculate their credit scores.
  • Credit reports provide comprehensive feedback on consumers or businesses to give lenders the power to make better business decisions. Accessing Compuscan’s credit reports, lenders are able to make intelligent credit risk management and affordability decisions. Compuscan’s Consumer Credit Check includes detailed credit bureau information and enriched data allowing in-depth overview of individual consumers.
  • By leveraging alternate data, such as psychometric scores, Compuscan’s Compuscore PSY is able to provide a credit risk score based on psychological testing.
  • Commercial credit checks supply scores and credit information on businesses, and Commercial Researched Reports provide detailed researched credit risk data on specified businesses.

The South African Credit & Risk Reporting Association’s (SACRRA) Project Evolution aims to have one unified consumer dataset based on quality data, standardised data input specifications and 48-hour credit bureau reporting for new and paid-up credit agreements.

  • Verification tools mitigate potential fraud and risk, by confirming that consumers are who they say they are. Compuscan’s verification tool suite is able to confirm identity numbers, biometrics, addresses, contact details and qualifications as well as bank and employer details. Marital and deceased status are verified through the Department of Home Affairs. These tools are essential to customer management through various phases of the credit life cycle.
  • Affordability assessment tools are vital for calculating minimum expense accounts to comply with the minimum regulatory expense norms stipulated in the National Credit Act. In the customer management phase, these tools allow lenders to determine the ability of existing customers to fund new credit agreements. In the debt collections phase, affordability tools that assist in maintaining legal compliance and determining applicants’ ability to pay when renegotiating terms of payment.
  • Predictive indicators allow lenders improve their credit risk management processes by predicting a potential customer’s monthly income, finding out who their likely employers are, and determining when they receive their income.

Verification, tracing, credit bureau information are a few ways companies can better their customer management processes.

Customer management and credit risk management

Compuscan credit bureau services are not limited to credit risk predictions, but are for customer management, which is integral to any successful business in the financial and related industries.

Many of the Compuscan credit bureau services used for customer acquisition can also be applied to customer management, especially for consumers wanting to increase loan amounts, or for dealings between consumer and lender. These tools enable lenders to effectively manage customers at various stages of the credit life cycle.

  • Verification tools are important in verifying information provided by a customer against credit bureau information, thereby mitigating potential fraud and risk. Changes in personal circumstances can often result in the need to re-evaluate existing customers’ credit profiles for risk of defaulting on payments.
  • Triggers and Alerts are useful in credit risk management as changes on credit profiles are flagged and alerts lenders of any situation that may increase credit risk. This allows the lender to act on the information and possibly prevent the need for collections or derby recovery.

Customer risk management is important to prevent credit risk and the need for debt collections.

Debt collections and debt recovery

Debt collection is the process of pursuing outstanding payments of debts owed by individuals or businesses. Economic pressures have made the collection of outstanding monies stressful, and non-payment negatively affects a business’ cash flow as well as its ability to pay its own debts. Debt collection and debt recovery are therefore integral to businesses in the credit industry, and Compuscan offers state of the art purpose-based tools to manage these processes.

Tracing tools for borrowers that are in arrears use a network of information, contact details and other information to track down non-payers. Compuscan’s automated customer financial movement tracking tool automatically flags changes in monitored customers’ profiles.

During the debt collection, tracing tools are very important; however, a number of tools such as verification, affordability, scoring, credit reports, amongst others, are also used to ensure the accuracy and efficacy of collections and recovery.

Debt collection and debt recovery rates can be reduced by using Compuscan Credit Bureau Services.

Credit Bureau Services

In today’s economic climate, Compuscan’s credit bureau services provides lenders with a competitive edge in the form of powerful, accurate, comprehensive, up to date data on individual consumers and organisations. This information is used to enhance business decisions and overcome industry-related risks by using data, analytics and our expertise.

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