In an instant: Equifax hopes new system will help dealers sell more cars

EquifaxBeing able to instantly verify customer information such as employment record and income sometimes can make the difference between closing a deal and losing the customer, according to Equifax.

The reason is that sending customers home to retrieve their information greatly increases the chance that they won’t be back, the credit reporting agency said.

But dealers are faced with a difficult choice, because it’s also the case, according to Equifax research, that nearly 25 percent of borrowers purposely or inadvertently inflate their stated income on auto finance applications by 15 percent or more. That increases the possibility of delinquencies and charge-offs for dealers and their lender partners, such as Santander Auto Finance.

Equifax’s proposed solution to this dilemma is The Work Number, a proprietary database of more than 248 million employer-direct payroll records. Currently, the credit agency provides income and employment information to banks, mortgage companies, auto dealerships and other commercial entities when authorized by the consumer in compliance with the Fair Credit Reporting Act.

In the future, more information may be added to the database, as more data is collected on customers.

Employers such as Home Depot, the IRS, Gap Inc. and many others provide employment information for Equifax’s verification systems. That allows automotive dealers with a permissible purpose and consumer consent to verify their consumers’ reported income and employment.

Verifying this information helps the dealer clear up common lender stipulations generated during the auto financing process and ensures accurate information on loan applications. This removes roadblocks for the 75 percent of consumers that Equifax estimates accurately report their income on applications.

Equifax recently partnered with Credit Bureau Connection, a company that provides web-based solutions software to dealers, allowing their clients access to The Work Number’s data.

“We understand the odds of a buyer returning to complete a vehicle purchase decrease substantially if they are forced to leave the dealership to obtain necessary income and employment proof,” said Mike Green, president and CEO of Credit Bureau Connection, in a press release. “Having the ability to satisfy this requirement while the buyer is in the buying mode is vital to a dealership’s closing ratio.”

Having the ability to instantly verify information also should help dealers make their own decisions about the customer standing in front of them.

– Larissa Padden

 

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