Approve No-Hits With Confidence and Unlock an Underserved Market

Each year through 2024, Canada will welcome more than 430,000 new immigrants — the highest levels in history — under the Immigration Levels Plan.¹ This presents the Canadian credit market with a golden opportunity to serve this expanding population and help immigrants build their credit. However, to grow in this sector, financial services organizations must overcome the no-hits dilemma.

Depending on portfolio risk and product mix, no-hits comprise 7%–10% of credit applications on average; yet actual approvals are significantly lower at 2%–4% based on a TransUnion analysis. As the immigration population increases, so will no-hits — thereby leaving a significant portion of the population heavily underserved.

The problem with no-hits

A no-hit occurs when the full identity of an inquiry can’t be matched sufficiently to a single credit file. Because there’s limited data on these cases, it’s difficult to establish both identity legitimacy and creditworthiness. That said, many no-hits are actually legitimate identities of those who are either brand new to credit or just became new Canadian consumers.

These real identities are sometimes confused with fraudulent synthetic identities. The risk is real: No-hits have a fraud rate eight times worse than hits. Given the risk, some organizations outright reject no-hits Or request from these consumers to jump through hoops, creating friction for them and unnecessary manual processes for employees. When this happens, chances are consumers will just move on to other opportunities. When they get declined, they apply for credit with a competing business.

The rising population of new immigrants likely driving an increase in no-hits presents an untapped market for credit providers. Even increasing approvals of the no-hit population by 1%–2% could constitute a boon for business. But it’s vital to have the ability to determine legitimate no-hit identities from fraudulent ones.

Kick out fraudsters so you can target legitimate consumers

A calculated approach to targeting this audience starts with eliminating as much fraud as possible. That’s where TransUnion TruValidate™ Identity Exchange comes in.

This solution verifies identities, provides industry-leading fraud capture rates and assesses identity risk against a broad set of data, enabling you to decide your risk threshold and accept more applicants.

Leveraging TransUnion’s data assets and insights, Identity Exchange combines diverse and trended credit data elements to create a robust view of identity risk — even for the no-hit population.

The Identity Exchange solution can score no-hits by looking at how elements of that identity are being utilized across the entire bureau ecosystem. So, even if the platform hasn’t seen the full identity of an applicant before, it may have seen individual elements, such as name, address, phone, email or SIN, across more than one credit file. For example, it could be a phone number that’s been used at three different addresses in the past 30 days or a SIN number used with multiple names.

Those calculations (plus others) allow Identity Exchange to assess the validity of no-hits. In fact, with Identity Exchange, the worst-scoring 25% of no-hits contains 80% of all no-hit fraud. The best-scoring 50% contains only 8% of all no-hits fraud. Essentially, with this solution, you can remove many fraudsters, allowing you to target remaining no-hits with confidence.

Check out our new video or contact us today to learn more about how TransUnion TruValidate Identity Exchange can help grow your business by targeting underserved no-hits.

¹ CIC News