Our expert panel provided many great insights on credit washing at last week's webinar co-sponsored with GDS Link.
As a reminder, credit washing is a form of first party fraud where an individual removes derogatory information from their credit report by lying about being the victim of identity theft. After doing so, their credit score can jump 200-300 points, so they can then trick lenders into issuing them credit that the lender never would have provided to somebody with as many missed payments, charge-offs, or other negative information.
During the webinar, the panel agreed that the incidence of credit washing has gone up significantly in recent years and is a growing risk issue facing financial institutions.
Several factors have lead to this increase:
The impact on financial institutions of the increase in credit washing is significant:
A few recommendations were shared for lenders to reduce the risk from credit washing:
The full webinar can be viewed here.