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In today's digital world, we expect our interactions with businesses
to be as quick and frictionless as online shopping – including
everything from making a dinner reservation to applying for a home mortgage.
Of course, the latter example is much more complex, as
mortgage lenders likely must verify your employment and income
information as part of your application process. That verification
can help lenders better understand your ability to pay for a loan,
and in turn, help you achieve some of life’s most important
milestones - like moving into that new home.
Your employer has a preferred way of managing requests to
verify your employment or income. While some employers handle those
requests directly, many rely on outside firms to provide
verifications. Let’s explore three different options:
1. Automated digital verifications from The Work Number®
If you’ve ever bought or leased a house, apartment or car –
without having to take extra steps to help your lender verify your
income and employment – you likely benefited from instant digital
verifications from a service such as The Work Number. That’s because
when lenders use The Work Number, they can access an instant report
with an applicant’s employment and/or income information, sourced
from 2.7 million U.S. employers.
The Work Number service model starts with the consumer’s
engagement, and it provides consumers, employers, and verifiers (such
as lenders) a frictionless process that offers the highest-class
customer experience, quality, security, and privacy. With this
automated, digital service, the verification goes directly from your
employer or payroll provider to the lender, which means a streamlined
experience for you.
2. Verifications from other providers
Other verification providers may require you to grant a
third party access to your bank or payroll account so the lender
can use that information to verify income, employment and more.
These third-party aggregators access your financial data directly
through your account, then share that information back with the
lender. Once access has been granted, the aggregator may let you
know when they have accessed your data to share with the lender.
It’s important to note that granting this type of access to
your data can come with its own set of risks. Recognized security
best practices advise against sharing your login credentials with
anyone, particularly when it comes to your bank or payroll account.
And providing your login credentials to an aggregator so they can
access your employer’s network in order to view your payroll data
may also be against your employment agreement. Additionally, the
access you grant to aggregators may not end once your loan
application has been processed; you may need to go back to your bank
account to unlink access.
It’s also important to think about just how involved you
want to be in the verification process. Certain providers
require consumers to set up a separate account within their
platform to review the data they have collected and only then
provide that data to the verifier. While some consumers may
prefer this model, many may find that it takes more time and
creates more of a hassle than anticipated.
3. Employer- or employee-provided verifications
Some employers manage employee requests for verifications of
income or employment themselves. For example, if you are applying
for a loan, the lender may contact your employer and request proof
of employment and/or income. This may slow down the verification
process since your employer may not be able to provide the
verification immediately, especially for requests received on
evenings or weekends.
Sometimes you as an employee may be able to handle your own
verification requests. For example, if a lender accepts a paystub, W-2
or tax return as proof of employment or income, you may have the
option of pulling together this information yourself. But of course,
this manual process can create a hassle for you and the lender -
especially if you forget to bring those documents with you - and it
can also introduce security and privacy concerns associated with
providing copies of sensitive information.
The Work Number, an automated, digital verification
solution, enables faster lending decisions than other methods –
without requiring you to hand over your private bank account
credentials, create a separate account and manage the process
yourself, or track down and share copies of sensitive documents.
Instead, when a lender verifies your income and employment through
The Work Number, it receives an instant report with the requested
information. And that means less work for you.
Importantly, the use of data in The Work Number is governed
by a U.S. federal law called the Fair Credit Reporting Act (FCRA).
Pursuant to the FCRA, any verifier - such as a lender - must undergo
a credentialing process and qualify for a legally required
permissible purpose - such as reviewing your loan application - in
order to access your data from The Work Number.
By streamlining decision-making processes for lenders, The
Work Number can help you receive faster decisions so you can enjoy
some of life’s most important events with less hassle and stress.
To learn more about other ways that verifications from The Work
Number can help streamline important processes, visit our other
Newsroom articles here and here.