Direct Mail Post-Screening

How to Optimize Your Campaign:

Even if you’ve employed all the right pre-screening best practices on your latest direct mail efforts, you still must navigate the critical post-screening period that can make or break your campaign.

Non-prime consumers are a volatile market segment, prone to shifting circumstances … yet the source of exceptional opportunity if understood.

A lot can happen after the initial screening – job change, divorce and more – to cause a prospective borrower to drift outside of a lender’s acceptable predetermined credit criteria. Clarity’s direct mail solutions can help you assess new [...]

See Your Applicant’s Future Behavior

Alternative credit data:
The crystal ball to detect the intent to not pay consumer before you approve the loan

Underwriting a subprime consumer loan can feel like trying to see the future. Lenders need the right tools to help bring that future into better focus. While lenders navigate the process, they must also balance risk mitigation with revenue generation.

Preventing early payment default for subprime borrowers requires a different type of underwriting because their motives and credit history can vary. Some lenders think their job is [...]

Subprime Data Is Key in the Fight Against Loan Stacking

Before lenders can reduce loan underwriting costs and approve more loans, they must first be able to authenticate eligible applicants and flush out the abusers. That’s a tall task, given today’s environment of online lending, competitive pressure and quick turnarounds. Fortunately, it’s a goal that leaders throughout the industry are tackling from multiple angles.

With subprime consumers now representing more than half of the market, Clarity Services is uniquely positioned to provide lenders with a complete picture through exclusive historical and real-time reporting from this key segment. For example, when consumers open multiple loans [...]

Clear Recent History:

Underwriting Clear Recent History

An Underwriting Tool to Expose Loan Stacking

For the past several years, more than half of the population has been categorized as subprime*. It is widely understood that subprime consumers have fewer opportunities to access credit because the underwriting process is more challenging for lenders. Whether because of low credit scores, or due to a lack of credit history (known as thin-file), these consumers are often forced to use alternative financial services to secure necessary funds.

Here’s the thing you need to know about alternative financial service providers: a large portion of them don’t report to the big three [...]

How Lenders Can Protect Themselves from Loan Stacking

stop-loan-stacking

The term loan stacking is appearing more and more in industry headlines. For many lenders, the increasing media coverage might raise more questions than answers.

Just what is loan stacking? How does a lender identify it? How can you tell the difference between a stacker and a shopper?

The basic definition of loan stacking is when a consumer takes out one or more unsecured loans or cash advances on top of loans of a similar type that already exist. Clearly, this poses additional risk to lenders because the more loans a consumer has, the less likely they are to repay all of [...]

The Truth Behind Loan Stacking:

Why Real-Time Reporting Won’t Protect You from Loan Stacking

It might surprise some lenders to know that not all credit reports are created equal, especially when it comes to loan stacking prevention. Traditional credit bureaus update lender information monthly to coincide with their billing cycles. Most lenders send bills once per month and report their data at the end of each cycle. That means it can take 30-45 days for new credit transactions to appear on a credit report. However, in the fast-paced alternative financial space, credit bureaus must report in real time to be competitive.

Amid rising concerns about the effects of loan stacking in the lending industry, some alternative credit bureaus offer real-time reporting as the answer. They would have [...]

Loan Stacking – The Problem and The Solution

Loan stacking, when a consumer takes out multiple loans without a lender’s knowledge, is surfacing as a major issue in the online unsecured lending industry. Simply put, a consumer takes out a loan online, then proceeds to take out several more loans online before the credit bureau loan reporting technology can report the loan activity. While there have been a number of recent articles written on the phenomenon, the problem is not a new one. It is simply a matter of technology and a proliferation of consumer-not-present (online) credit offerings.

It used to be that in the prime credit bureau space, the frequency or velocity of consumer credit applications was much slower than today. And the reporting of new credit [...]

The Missing Piece: Alternative Data for Enhanced Decisions

212% increase in usage of alternative financing from 2014-2015
The financial crisis of late 2008 triggered a sharp increase in unemployment, seeing the rate jump from 5.5 percent to a high of 10.1 percent; a rapid reduction in consumer loans offered by large banks; and a staggering devaluation of home values resulting in foreclosures and strategic defaults creating a major shift in consumer FICO® credit scores. It is believed that 30 to 40 million consumers experienced a negative change to their FICO® Score with 15 to 20 million consumers seeing their score drop below 600.1 This credit score shift [...]