TransUnion Delivers Solution that Mitigates Authorized User Abuse

TransUnion, working with 6 of the top 10 mortgage lending institutions, has developed a customized approach that enables lenders to identify consumers who may have added authorized user accounts to artificially inflate their credit report and standing. This tailored, analytic approach was applied to nearly 2 million approved mortgage applicants in which TransUnion examined the extent authorized user accounts were being used to potentially "boost" credit scores. Taking a look at mortgage approvals during a three month period (July-September 2006), TransUnion recognized that approximately 50 percent of this loan pool was potentially impacted by this practice.

Based upon this analysis, TransUnion developed a set of highly predictive credit characteristics. Through a combination of these credit characteristics, TransUnion can help lenders identify consumers who may have significantly improved their credit profile by adding authorized user accounts to their credit file. TransUnion’s solution can immediately assist Lenders in improving their assessment of credit applicants and collection practices on recently approved loans.

By strategically deploying a combination of "authorized user" and "non-authorized user" credit characteristics, TransUnion offers a tailored solution that will notify financial institutions of potential artificial score inflation. The solution is customized according to a lender’s specific credit criteria and risk threshold and is available online or in batch delivery.