CHICAGO, Sept. 26 /PRNewswire/ -- TransUnion expanded its authorized
user solution offerings to help the financial industry better manage their
portfolios by identifying consumers who may have added authorized user
relationships to their credit files in an attempt to artificially enhance
their credit standing.
Authorized user abuse occurs when consumers with extensive credit
histories, high credit limits and solid repayment profiles designate other
consumers with poor or non-existent credit histories as authorized users on
their accounts. The positive account is then reported by the creditor for
inclusion on the authorized user's credit file, potentially making the
consumer appear to be more creditworthy than they are. The authorized users
may then apply for new credit and may be approved when they would not
qualify otherwise, or they may qualify for pricing that does not accurately
reflect their true credit risk.
"For the financial industry, authorized user abuse makes it difficult
to accurately assess the credit risk of individuals and set portfolio
strategies," said Dina Anderson, senior director, Analytic and Decisioning
Services. "TransUnion's Authorized User Solution Suite helps detect
consumers trying to boost their perceived creditworthiness so financial
institutions can avoid potential delinquencies and defaults, unanticipated
losses, understated loan loss reserves and incorrect risk ratings for
capital markets."
TransUnion worked with top mortgage lending institutions to analyze the
impact of the authorized user dynamic on risk assessment and lending
practices. The company then developed a comprehensive solution suite to
help make more informed decisions throughout the customer lifecycle, from
acquisition to portfolio review to valuation. Financial institutions can
select which components of the suite best meet their specific needs. The
solution suite includes:
Authorized User Characteristics describe various aspects of authorized
usership on a given credit file to help predict abuse. Available for batch
prescreen and portfolio review applications.
Authorized User Alerts notify the lender when a large number or
percentage of trades on a credit file have authorized user status to help
identify applicants who may require additional review in the application or
underwriting process.
Authorized User Custom Analysis identifies the segment(s) of high-risk
consumers within the portfolio or applicant population that have
demonstrated a significant change in their credit profile due to the recent
addition of authorized user accounts to their respective credit files. The
solution is customized according to a financial institution's specific
credit criteria, business model and risk tolerance.
Authorized User Landlord Identification Analysis enables financial
institutions to identify those accounts in their portfolios that are
potentially being used to assist consumers in boosting their
creditworthiness.
"Although the assignment of authorized users to an account is not
illegal and the vast majority of those represent legitimate authorized user
relationships, misuse still presents a potential threat to the health of
any lender's portfolio," added Anderson. "With TransUnion's Authorized User
Solution Suite, lenders can more accurately assess the credit risk of
consumers and proactively address this concern today."
About TransUnion
As a global leader in credit and information management, TransUnion
creates advantages for millions of people around the world by gathering,
analyzing and delivering information. For businesses, TransUnion helps
improve efficiency, manage risk, reduce costs and increase revenue by
delivering comprehensive data and advanced analytics and decisioning. For
consumers, TransUnion provides the tools, resources and education to help
manage their credit health and achieve their financial goals. Through these
and other efforts, TransUnion is working to build stronger economies
worldwide. Founded in 1968 and headquartered in Chicago, TransUnion employs
more than 4,000 employees in more than 30 countries on six continents.
http://www.transunion.com/business
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