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Hemanth Bhatia

Head of Product

8 min read

July 24, 2022

Dealing With An Incomplete Credit Risk Picture

Traditionally, the first step to verifying income data was the verification of documentation like KYC, income tax returns, the net worth of your assets and credit history. While asking for the given data from the borrower is the norm, there are certain limitations to this process. Typically, gathering and verifying these documents manually is extremely inconvenient and inefficient, especially when dealing with a large number of applicants. It involves a large amount of paperwork, and processing them manually can lead to errors as well as delays. 


The manual verification process lacks standardization due to the various types of documentation to be collected and verified. Further, physical documentation can provide only limited information about the borrower. Thus, the limited and lack of updated information fails to provide lenders with a more holistic insight into the financial standing of the borrower.


Data Beyond Traditional Credit Score & Income Tax Return Can Improve Underwriting


In today’s digital world, lenders are seeking more insight into the borrower’s ability to pay. They are opting for payroll automation as it provides a holistic view of the applicant and provides updates in real-time. 


Compared to the manual approaches to income and employment verification, automated payroll verification solutions help streamline processes and reduce inefficiencies in the loan approval process. 


Since underwriting involves gauging the ability of the borrower to repay, it is important to ensure that the complete financial picture of the person seeking the loan can be obtained. For underwriting to be effective, it is integral to look beyond simple credit scores and income tax returns and obtain an in-depth understanding of the borrower’s financials. 


Unlike manual processes, automated payroll verification provides a holistic view of the borrower by including various factors such as payslip verification, income and employment data, real-time updates of financial changes, etc. This ensures that the underwriting process is more credible and reduces the credit risk of the lenders.


Real-Time Income & Employment Data Is The Key To Effective Loan Decisions


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©2024 TartanHQ Inc.

Empowering businesses with API-enabled solutions to build next-generation products.

Subscribe to get an update :

©2024 TartanHQ Inc.