Core Insights - TransUnion has launched a Credit Washing Solution to combat the practice of credit washing, which involves the removal of legitimate credit data from profiles, affecting risk assessments for lenders [1][2] - Approximately 5% of U.S. consumers have had charge-off accounts suppressed for atypical reasons, leading to an estimated $10 billion in debt being erased from credit reports by year-end [1] - There has been a significant increase in charge-off suppressions, with a nearly 700% rise in consumer-initiated suppressions and a 200% increase in lender-initiated suppressions over recent years [1] Group 1: Credit Washing Impact - Credit washing is detrimental to the credit ecosystem, causing lenders to face financial losses due to inaccurate representation of consumer credit risk [2] - Consumers with atypical charge-off suppressions are 3.5 times more likely to charge off a new account within a year compared to those without such activity [2] Group 2: Credit Washing Solution Features - The Credit Washing Solution helps identify high-risk consumers before they become financial burdens for lenders [2] - The solution enables lenders to route potentially high-risk consumers for manual review, optimize credit limits, and reduce early charge-offs [3] - It includes three powerful indicators: Credit Washing Default Score, Tradeline Washing Attributes, and Inquiry Washing Attributes [5] Group 3: Implementation and Delivery - The solution is initially offered as an add-on to TransUnion's credit and model reports and can be utilized during prescreen, prequalification, and portfolio review processes [4] - Additional delivery channels and third-party platform integrations are in development and will be introduced in the near future [4]

Core Insights - TransUnion has launched an innovative Credit Washing Solution aimed at helping financial institutions detect and combat the suppression of legitimate credit data, a practice known as credit washing [1][7] Industry Overview - In 2025, approximately 5% of U.S. consumers had charged-off accounts suppressed for atypical reasons, leading to an estimated $10 billion in debt being erased from credit reports [2] - There has been a nearly 700% increase in consumer-initiated charge-off suppressions over the past two years and a 200% increase in lender-initiated suppressions over the last four years [3] Company Strategy - The Credit Washing Solution utilizes advanced analytics and machine learning to identify hidden risks associated with credit washing, allowing lenders to make more informed decisions [3][7] - The solution is designed to help lenders route high-risk consumers for manual review, optimize credit limits, and reduce early charge-offs [6] Product Features - The solution includes three powerful indicators: a Credit Washing Default Score, Tradeline Washing Attributes, and Inquiry Washing Attributes, which help assess the risk of consumers with a history of charge-off suppression [8] - It is initially available as an add-on to TransUnion's credit and model reports and can be used during prescreen, prequalification, and portfolio review processes [6] Market Impact - The suppression of derogatory data can inflate a consumer's credit risk by at least one risk tier, with some cases shifting from subprime to super prime overnight [4] - Consumers with atypical charge-off suppressions are 3.5 times more likely to charge off a new account within a year compared to those without credit washing activity [4]

Core Insights - The analysis from TransUnion highlights a significant rise in fraud-related charge-off losses in auto lending, which are notably higher than those in other consumer credit products, driven by synthetic identity fraud and the emerging threat of credit washing [1][2][3] Fraud Losses in Auto Lending - For loans originated from March to September 2023, average dollar losses due to fraud in auto loans were 21 times greater than in credit cards and six times greater than in unsecured personal loans [2] - The average loss in auto loans was reported at $19,611, significantly higher than the averages for unsecured personal loans ($3,427) and credit cards ($940) [5][6] Characteristics of Auto Fraud - Elevated loss rates in auto lending are attributed to larger loan amounts and evolving tactics by fraudsters, despite lower incidence rates compared to credit cards and unsecured personal loans [3] - Among consumers flagged as likely to be synthetic, those in prime and better risk tiers exhibited a bad rate 12.5 times higher than other consumers, with average balance losses exceeding $22,000 per consumer [4] Credit Washing Dynamics - Credit washing involves consumers fraudulently disputing accurate data to temporarily enhance their credit profiles, creating a misleading impression of borrower credit quality [8][9] - Charge-off rates for credit washers with super prime risk scores were comparable to those for non-credit washers in the near prime tier, indicating a disconnect between perceived and actual risk [10][11] Implications for Lenders - The rise of credit washing complicates the ability of lenders to distinguish between genuine and manipulated credit profiles, particularly among lower-risk credit tiers [13] - Lenders are encouraged to adopt fraud-specific attributes and verification tools to detect anomalies and mitigate potential losses [13]