Auto Loan Fraud on the Rise
Auto loan fraud and credit washing scams are increasing, with fraudsters manipulating credit scores to access loans, even among low-risk borrowers.
A new study from TransUnion reveals that credit washing is a growing concern for auto lenders, as it allows borrowers to temporarily boost their credit scores by disputing accurate negative information on their reports.
Fraudsters are increasingly using a tactic known as credit washing to exploit auto lenders.
- Credit washing works by triggering data suppression, where credit bureaus temporarily remove disputed information while investigating claims.
- Fraudsters target accounts where suppressing a single negative record provides the largest boost to their credit score.
This enables borrowers to secure an auto loan with no intention of repaying it, posing a heightened risk to lenders, even among historically low-risk borrowers.
Author's summary: Auto loan fraud is growing through credit washing scams.
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