Equifax Now Reporting On How Rejected Loans Perform

Derek Kreindler
by Derek Kreindler

Credit Unions will now be able to follow up with applicants who were unable to procure loans, and see if they pursued credit at other institutions, thanks to a new service from Equifax.

The new Lost Sales Analysis tool is designed to show credit unions which borrowers received loans from other institutions, and how they performed. Although no personal or identifying information is said to be divulged, it is detailed enough for financial institutions to identify whether the loan in question should have been approved or if it was indeed a risk that they were wise to avoid.

While the product is ostensibly pitched as a way to give credit unions a deeper look at their lending business, the implication seems to be “look at all the loans you didn’t make that could have been profitable – no matter how dreadful the credit score or the terms of the loan.


Derek Kreindler
Derek Kreindler

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  • Superdessucke Superdessucke on Dec 10, 2014

    If this is an honest and not PC study, I'll guess the answer will be "not well." Don't we have a case study on this already, called the 2005-08 housing market?

    • Stuki Stuki on Dec 10, 2014

      For the banking/credit industry, that was most lucrative period in history. Up until now. Having the Government rob others on your behalf is lucrative as heck in dystopias like ours.

  • Sector 5 Sector 5 on Dec 10, 2014

    Equifax - they're insurance investigators aren't they? I know they intimidate for the insurance industry.

  • S2k Chris S2k Chris on Dec 10, 2014

    This would be valuable in identifying trends about why people default. People tend to look at a credit score as a final answer, but it takes more critical thinking than that. For instance, the housing crisis lead to a huge number of defaults and short sales that negatively impacted credit ratings, but if one has an otherwise clean credit report, their score may not accurately reflect their true risk. As a landlord, I look beyond the immediate score to identify people who have played it safe with car loans, credit cards, other bills, and only have a SS/foreclosure on their record because those people tend to be ideal renters. A similar analysis might be done with medical bankruptcies, or divorces. These are traumatic events that often hugely impact credit scores, but again might not accurately reflect risk of default on a car loan.

    • See 1 previous
    • S2k Chris S2k Chris on Dec 11, 2014

      @highdesertcat Not sure what the point of your first paragraph is, aside from the old humblebrag. Yes, with limited credit utilization, and presumably a pattern of paying off debts, you would expect a high credit score. That's not news. As to the second paragraph, that's my point, not all defaults are the same. Sometimes it's over reach on credit (running out of money) but sometimes it's due to specifically targeted actions that should not necessarily have an impact on other areas. Like I mentioned, a lot of people short-sold houses in the last 5 or so years, that impacts their credit. It will prevent them from getting a mortgage, which I don't have a problem with, but should it also prevent them from getting a car loan or credit card? I'm guessing that studying the default rates for this pool on non-mortgage debt will show that they are a good credit risk for non-mortgage debt, even though they may have a subprime credit score.

  • ChichiriMuyo ChichiriMuyo on Dec 10, 2014

    I know how the b&b feel about credit (especially sub-prime) and that its good business sense to to write in a way that the readership will find favorable. However, if the b&b are right, what this scheme will actually do is tell credit lenders "look at how good your loan officers are and how much money they saved you." Credit unions are already tighter with their money because they serve their customers instead of themselves. If these people really are ticking time bombs then that's what the data will show, and if they're not then maybe it means the way credit scores are calculated are slightly askew. The one thing I dont see happening, though, is for credit unions to take any more undo risks that they already do. My car loan with a greater than 750 credit score is with a credit union that made sure every t was crossed and every i dotted. And, again, it's because they serve their customers (me included) above any other interest. Maybe a big bank or manufacturers lending arm may make bad deals with that kind of data, but credit unions will need proof that the info they get passed in this manner actually means something.

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