Lenders have come to rely on automated employment and income verification.
A household name in that space, at least within the auto finance industry — Equifax’s The Work Number —passed a milestone earlier this month, signing up its 5,000th client to provide real-world employment and income data.
Auto lenders and dealerships use the data to verify self-reported information. Client No. 5,000 was the University of Maine System, according to the Atlanta-based credit bureau. The Work Number database covers 75% for the nation’s Fortune 500 employers, Equifax said.
Besides the biggest firms, the credit bureau is working to add small and mid-sized companies, plus federal, state and local government employers, the company said. The database was launched in 1995, Equifax said.
Unfortunately customers — and dealerships, on occasion — don’t always report customer data accurately or consistently, whether it’s an honest mistake or attempted fraud, the credit bureau said. Interestingly, besides the obvious problem of overstating income, it’s also common for customers to understate their income, Equifax said.
Equifax said in a 2014 report that almost 25% of all borrowers overstate their income by at least 15%. For loan applicants who earn $50,000 or more annually, however, 75% understate their income to some degree, the credit bureau said.