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. The fight against loan stacking is 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 with different lenders, Clarity data shows a 28 percent default rate on the first loan.
“Determining loan eligibility for a subprime borrower now means understanding their financial circumstances, or stability, and observing and flagging credit behaviors that weren’t always trackable or even considered in order to detect fraudsters hard at work,” explained Clarity Services President and CEO Tim Ranney.
Fraud Prevention Products Provide New Subprime Insight
Clarity offers a number of fraud-prevention products that offer fresh, cutting-edge methods to help lenders better assess and analyze identity and fraud risk. To combat loan stacking, Clarity’s Temporary Account Record is the only solution from any bureau that not only shows current loans but also pending loan transactions, so you can see a customer’s current financial state.
Once a customer is approved for a loan and signs the papers, that loan will appear on their credit report as a temporary tradeline. It will then be much more difficult for that same customer to secure additional loans with other lenders.
Put Clarity’s Fraud Prevention Solutions to Work for You
Loan stacking will continue until credit bureaus close the reporting gap and put lenders back in control. Clarity can help you make informed decisions to protect your revenue, your investors, and your bottom line. To learn more about Clarity’s fraud prevention solutions, contact us today at 727-240-2948.