Cogent Road, a provider of Internet-based applications for the mortgage industry, has launched 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 cardholder, the company explains. The tool is available free of charge to Cogent Road's 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.
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, the company notes. For a small transaction fee per file, the padded credit score detection tool screens every credit report and sends the rating directly to the lender's loan management systems.
Source: Cogent Road