Provide Seamless Income Verification Experiences

July 19, 2022 by Theresa Nguyen

Income verification is a critical step in determining a consumer’s ability to pay. The challenge, however, is conducting verification of income in a way that’s seamless for both lenders and consumers. While many businesses have already implemented automated solutions to streamline operations, some are still relying on manual processes or solutions built on older technology to verify income.

Let’s take a closer look at the drawbacks of traditional income verification processes, how they can be optimized, and how businesses can leverage Experian to deliver fast and frictionless verification experiences.

The drawbacks of traditional income verification

Employment and income verification provides lenders with greater visibility into consumers’ financial stability, but it often results in high-touch, high-friction experiences when done manually. This can be frustrating for both the business and potential borrowers:

  • For the business: Manual verification processes are extremely tedious and time-consuming for lenders as it requires physically collecting and reviewing documents. Additionally, without reliable income data, it can be difficult for lenders to accurately determine a consumer’s ability to pay, which can negatively impact their lending decisions and lead to higher origination risk.
  • For borrowers: Today’s consumers have grown accustomed to digital experiences that are fast, simple, and convenient. An income verification process that is slow and requires hefty paperwork can drive consumers to a competitor who can meet their expectations for quick and seamless digital experiences.

How can income verification be optimized?

To accelerate the verification process and gain a more complete view of consumers’ financial stability, lenders must look to automated income verification. With automated income verification, lenders can obtain timely income reports to accurately verify consumers’ income in minutes rather than days or weeks. Not only does this allow lenders to approve more applicants quickly, but it also enables them to devote more time and resources toward improving their strategies and enhancing the customer experience.1

The right automated income verification solution can also capture a wider variety of income scenarios. With the click of a button, consumers can give lenders permission to access their financial accounts, including checking, savings, 401k, and brokerage accounts. This creates a frictionless verification experience for consumers as their income information is quickly extracted and reviewed. Retrieving data directly from financial accounts also provides lenders with a fuller financial picture of consumers, including those with thin or no credit files. This helps increase the chances of approval for underserved communities and allows lenders to expand their customer base without taking on additional risk.2

Case study: AppFolio streamlined income verifications to approve more tenants faster

In addition to lenders, other industries can benefit from automated income verification solutions. AppFolio Property Manager is a full-service, online platform that facilitates all levels of property management, including renter screening, payment services, client-resident communications, and service requests. Wanting to streamline the approval process and eliminate fraudulent lease applications, AppFolio searched for an income verification service that would easily integrate into its platform while being fast, convenient, and digitally efficient.

By implementing Experian’s income verification solution, AppFolio clients saw a 51% increase in accounts and a reduction in falsified and fraudulent documents. Additionally, of all applicants who applied at properties enabled with Experian’s solution, 46% had an income report produced for them compared to the 28% AppFolio had seen from other solutions.

“Applicants are being approved faster, reducing vacancy time, which has a direct impact upon our customers’ bottom line,” said Travis White, Product Manager at AppFolio.

Read our case study to learn more about how AppFolio clients have optimized their income verification efforts with Experian.

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1 AppFolio Case Study (2021).
2 Experian Income Verification Product Sheet (2017).