Cogent Road launches padded credit score detection toolMortgagePress.comCogent Road, credit scoring, Funding Suite
Cogent Road, a provider of Internet-based applications for the
mortgage industry, has announced the launch of an automated tool
for detecting if a credit score has been artificially inflated due
to questionable or untrustworthy "authorized user" accounts within
the borrower's profile. This process is known as "piggybacking,"
because the borrower's credit score "piggybacks" on the seasoning
and payment history of the actual card holder. The tool is
available free of charge to Cogent Roads existing Funding Suite
clients.
The solution examines credit reports to detect the probability
that a borrower's credit score is being artificially manipulated
based on a different individual's payment history. Using a complex
series of comparative algorithms, this detection tool analyzes the
borrower's credit profile as a whole to detect whether or not
authorized user tradelines are consistent with his or her
historical payment pattern. This tool can also differentiate the
bona fide authorized user relations that occur in joint credit
applications, however it does identify if the spouses credit score
is influenced by authorized user accounts.
This information enables lenders to receive a more thorough
snapshot of a potential borrower's credit worthiness than the
credit score alone provides. The tool has a defined rating system
in order to alert underwriters to files they may want to further
investigate before funding.
The padded score detection tool is available to users of Funding
Suite, Cogent Road's flagship product, and other large mortgage
lenders. The MISMO-compliant application can be installed on-site
or can be accessed through an ASP model. For a small transaction
fee per file, the padded credit score detection tool screens every
credit report and sends the rating directly to the lenders loan
management systems.
"This fraud detection tool is designed to further enhance
lenders' credit screening capabilities," said Alan Baia, managing
partner of Cogent Road. "Purchasing seasoned tradelines through
credit repair companies enables borrowers to artificially increase
their credit scores to conceal credit weaknesses from lenders. By
detecting intentional attempts to manipulate credit scores, lenders
are able to reduce fraudulent loan activity."
Funding Suite enables mortgage originators to control operating
costs, more successfully qualify borrowers for loans and better
protect themselves from the potential liability of data
breaches.
For more information, visit www.cogentroad.com.
