1.Assets the businesss impact of credit bureaus data quality probles for the credit bureaus,for lenders, for individuals.
Credit Bureaus know that their own systems are responsible for many credit report errors. Some mistakes accures because of the procedures for maching loans to individual credit reports.They must continually contend with claims from customers who falsify lender information or use shady credit report companies that challenge all the negative information on a credit report regardless of its validity.Therefore they have to use automated system to forward customer disputes to lenders for veryfiation.
They have to spend more money for data processing center to sends customers protests and evidence.
Credit Reporting Agencies colect data from various sources to create a detailed file of an individual’s borrowing and bill paying habits. On one hand his information helps lenders assess a person’s credit worthiness, the bility to pay back a loan and can also effect the interest rate and other terms of loan, including whether a loan will be granted.
But on the other hand if the wrong information gets into their systems about potential clients from Credit Bureaus, they are losing these clients as well as money.
Credit bureus errors are impossible to fix. If the customer tries to contact the lender that made the error on their own, banks have no obligation to investigate it.Credit Bureau’s data quality problems can distroy individual’s life because that can effect the interest rates, other terms of loans including whther the loan would be granted,the error can even effect the chances of finding or keeping a job as some epmployers check he credit repots when making hiring or promotio decisions.
2. Are any ethical issues raised by credit bureausdata quality problems? Explain your answer.
Credit Bureaus are responsible for the consequences of their actions, lack of accuracy.Responsibility, accountability are ethical issues raised by Credit Bureaus. Systems don’t have impacts by themselves. U.S credit Bureus collect personal information and financial data from a variety of sources, including creitors, lenders, utilities,debt collection agencies and the courts. These data are stored in massive databses mintained by credit breaus and than sold to other companies to use for credit assessment.Responsibility for the concequences falls clearly on the credit bureaus and their management who choose to use systems that are responsible for many credit report errors and do not provide a proper traning as well as improving and updating systems to solve these problems.
3. Analyze the management, organization and technology factors responsible for credit bureaus’s data quality problems.
Organization factor responsible for credit bureau’s data quality problems is process of collecting and matching information. As U.S. credit bureaus collect personal information and financial data from variety of sources, the volum of information being transmitted from creditors to bureaus increases mistakeks.The credit bureaus have to determine how much variation to allow and still call it match. Credit bureaus workers should be better trained in matching information system as well as collecting and checking information.They also should hire more employees.
Management is responsible for monitoring service level, cost and promoting company’s strategy of solving quality problems.They should allocate the employees and financial recources to coordinate the work and achive better resoults. If credit report shows an error, bureau should contact the lender directly to correct the information.Management should definitely improve their problem solving system.
Credit Bureaus must carefully redesign and manage its IT infrastucture to make its business more efficient. They must streamline and coordinate their information systems, as well as to use improved solution for complete and accurate reporting.They also should use networking and for example extranets to cordinate their work activities with lenders for veryfication.
4.What can be done to solve these problems?
To solve these problems credit bureaus should change and invest in proper solutions program for verification to prevent credit report errors. Instead sending customers protests and evidence to a data processing center where every complaint is summurized with a short comment which is not understadable for banks, they should find a way and money to invest in system that would let them to contact the lender directly and correct the information. Also they should be more careful and properly trained for reciving information from other recources,imperfect data lead to imperfect matches. They should also change/improve the procedures for matching loans to individual credit reports,update their information systems and streamline coordination of their work activities with creditors, lenders, debt collection agencies and courts.