# Key Concepts and Definitions

## Introduction to Credit Reporting

### What is Metro 2®?

Metro 2® is the standard electronic format for reporting consumer credit data to the major credit bureaus in the United States. Developed and maintained by the Consumer Data Industry Association (CDIA), it defines the structure, field definitions, and business rules for furnishing credit information.

The major credit bureaus that accept Metro 2 files are:

| Bureau | Description |
|  --- | --- |
| Equifax | One of the "Big Three" consumer credit bureaus |
| Experian | One of the "Big Three" consumer credit bureaus |
| TransUnion | One of the "Big Three" consumer credit bureaus |
| Innovis | Fourth national credit bureau |


### Why Credit Reporting Matters

Accurate credit reporting is essential for several reasons:

**For Consumers:**

- Credit reports influence loan approvals, interest rates, and credit limits
- Inaccurate reporting can harm consumers' financial opportunities
- Consumers have rights under FCRA to dispute inaccurate information


**For Lenders:**

- Regulatory compliance (FCRA, Regulation V)
- Risk management through accurate credit assessment
- Legal obligations to furnish accurate information


**For Regulators:**

- FDIC, OCC, CFPB monitor furnisher compliance
- Examinations verify accuracy of reported data
- Enforcement actions for systematic errors


### Peach's Role as a Furnisher

Peach Finance acts as a data furnisher on behalf of its clients. This means:

- Peach collects loan performance data from its servicing platform
- Peach transforms this data into Metro 2 format
- Peach transmits files to credit bureaus on a monthly basis
- Peach maintains records for dispute resolution


## Snapshot System

Peach uses a snapshot system to capture the state of each loan at specific points in time. This is critical for credit reporting because:

**Definition:** A snapshot is a point-in-time record of all loan balances, statuses, and calculated metrics.

**Key Snapshot Fields for Credit Reporting:**

- `loan_status` - Current loan status (Active, Frozen, ChargedOff, PaidOff, etc.)
- `outstanding_balance_total_amount` - Total amount owed
- `overdue_number_days` - Days past due
- `overdue_over_30_days_balance_total_amount` - Amount past due over 30 days
- `charged_off_reason` - Reason for charge-off if applicable
- `charged_off_total_amount` - Amount charged off


**Snapshot Timing:**

- Snapshots are generated daily at the beginning of each day, capturing the loan state as of the end of the previous day
- For credit reporting, the system uses the snapshot from the last day of the reporting month


## Activity Date

The Activity Date is a critical Metro 2 concept representing the reporting period:

**Definition:** The last day of the month being reported. For example, if generating a file on January 5, 2026 for December 2025 data, the Activity Date is December 31, 2025.

**Calculation:**


```
activity_date = report_date.replace(day=1) - 1 day
```

For a report generated on January 1, 2026:

- report_date = 2026-01-01
- month_start = 2026-01-01
- activity_date = 2025-12-31


## Tradeline

A tradeline is the credit bureau term for a single credit account in a consumer's credit report.

**Key Tradeline Components:**

- Account identification (account number, creditor)
- Account type and terms
- Payment history and current status
- Balance and payment information
- Consumer information


## Days Past Due (DPD)

**Definition:** The number of days a loan payment is overdue.

**DPD Buckets for Metro 2:**

| DPD Range | Status |
|  --- | --- |
| 0-29 days | Current |
| 30-59 days | 30 days past due |
| 60-89 days | 60 days past due |
| 90-119 days | 90 days past due |
| 120-149 days | 120 days past due |
| 150-179 days | 150 days past due |
| 180+ days | 180+ days past due |


## Loan Statuses in Peach

Peach maintains internal loan statuses that map to Metro 2 Account Status codes:

| Peach Status | Description | Typical Metro 2 Status |
|  --- | --- | --- |
| Pending | Application submitted | Not reported |
| Originated | Loan originated but not activated | Not reported |
| Active | Loan is active and accruing | 11, 71-84, 93 |
| Frozen | Temporarily suspended | 11 with Special Comment |
| Accelerated | Full balance due immediately | 71-84, 93, 97 |
| ChargedOff | Written off as loss | 64, 97, DA, DF |
| PaidOff | Fully repaid | 13 |
| Canceled | Closed before activation | Not reported |


## Terminal vs. Non-Terminal Statuses

**Terminal Status:** A status that indicates the account has reached a final state and will stop being reported after one final report.

**Terminal Statuses:**

- 13 (Paid or Closed)
- 64 (Paid in Full - Charge-off)
- DA (Delete Account - Non-Fraud)
- DF (Delete Account - Fraud)


**Non-Terminal Statuses:**

- 11 (Current)
- 71-84 (Delinquent)
- 93 (Assigned to Collections)
- 97 (Charge-off with balance)


**Important Exception:** Bankruptcy charge-offs continue reporting with status 97 until the balance reaches zero, at which point they report 64 and become terminal.

## Monthly File Generation

Metro 2 files are generated monthly following this expected schedule:

- **Day 1-3 of Month:** File generation for previous month begins


## File Structure Overview

A Metro 2 file consists of the following primary record types:

1. **Header Record:** Contains reporter identification, activity date, and program identifiers. One per file.
2. **Base Segment:** One per loan, contains:
  - Account identification
  - Account status and payment information
  - Balance information
  - Consumer demographic information
3. **K1 Segment:** Original creditor information (when loan was originated by a different creditor)
4. **K2 Segment:** Purchased From / Sold To information (when loan ownership changes)
5. **L1 Segment:** Account number change information (when migrating from another system)
6. **Trailer Record:** Contains control totals for validation. One per file.