Is more data better, or is better data really, better? Whatever your philosophy, employment data is already, or should be in your mix of sources. And know this, employment data is not just for verifying employment anymore, it has the potential to move the needle for you in several ways.
Employment data attributes are now optimizing multiple steps of a customer’s lifecycle and experience with your lending business. Incorporating employment data into your workflow can create a more efficient, seamless, and expedited process for the consumer. Here are seven tips to help you leverage employment data and improve your customer’s lifecycle:
- Verify Identity: You can validate identity in real-time with employer reported data. This is more authoritative and accurate than self-reported, or information gathered from third parties. The employers gather ID information from an employee during the Form I9 or eVerify process, which require physical verification of documents. Knowing this is great because you can use employment data for mitigating fraud.
- Identify More Risk: During underwriting, an attribute simply indicating if an applicant is employed, regardless of position or income, has proven to be extremely predictive in assessing risk. By knowing whether a consumer is employed at the onset of the lifecycle (i.e. at the point of application), lets you segment risk groups quickly and easily. Applicants with verified employment go through a less manual process and make the online experience friendlier.
- Increase New Originations: Some of your models are going to point to a ‘No’ answer. Whatever the reason, verifying a consumer is employed may be the answer to taking a No to a Yes. Consumers that are employed are more likely to have the ability, and more importantly, the willingness to repay.
- Improve Operations: Are you verifying employment through a manual process? Waiting for the employer to return a call? Do you have to wait for normal business hours? Or, perform three-way calls to the bank to confirm payroll deposits? All these hurdles take time and cost money. Using an automated employment verification solution streamlines the transfer of information between consumers and lenders and reduces the overall cost of your operations.
- Increase Credit for Existing Customers. Knowing that a customer is still actively employed allows you to market to a segment of your existing customer base that you know is more likely to be a candidate for credit increases. We know that employment status is correlated to creditworthiness, so customers that maintain their employment status are probably going to be better customers to offer a credit increase. At the very least, those are the customers you want to prioritize a credit increase review.
- Align Repayment with Payroll: Knowing the applicant’s last pay date and pay cycle allows you to accurately align their payroll cycle with their loan repayment schedule and increases the likelihood of a successful payment.
- Prioritize Collections: Ever wish you could identify which of your collection customers are better to keep in-house versus sending to a third-party collection company. Knowing who is actively employed allows you figure it out. If a customer in collections is still actively employed, then odds are better that you will be able to collect the monies yourself rather than sending it to a third party.
So, whether you want more data or just better data, you now know employment data should be in the mix of the data you access. And, should be used for more reasons than you previously thought.