How Email Address Checks Impact Loan Approval Rate

Did you know that the most honest and trustworthy borrower can be denied a loan? Simply because of the lack of credit history. 

There is a way for loan providers - creditworthiness assessment using alternative data. One of the sources is an e-mail address.

It’s a unique identifier that can provide a lender with a lot of information about a potential borrower. 

Let’s discuss the role email insights play in credit scoring.

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The power of email in modern credit scoring

According to Statista, there are about 4.5 billion email users worldwide. 

A lending institution can gather a lot of information about almost any potential borrower just by analyzing their email address.

According to statistics, 64.8% of the global population is of working age, which means around 5 billion people are potentially eligible to qualify for a loan.

These statistics allow us to draw certain conclusions -  email is one of the reliable sources of alternative data for credit scoring. 

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Data that email lookup allows you to get

Email lookup is a technique that allows you to find information about an applicant only by their email address. 

We talked in detail about email lookup features and capabilities in one of our previous articles.

Let’s dive deeper on the information available through a potential borrower's email address.

Personal data of the email owner

Knowing the email address of a potential borrower, you can get access to the name, surname, and phone number.

The lender will receive information regarding any email addresses linked to the listed address.

This is important because statistics show that each user has an average of 1.86 email addresses. It is predicted that soon there will be two addresses per person.

Accordingly, a lack of linked addresses may indicate fraud.

Such data helps to eliminate fraudulent contact information and to verify that the borrower is the legitimate person.

Registered online accounts

According to CyberNews, the average person in the United States has 100 –150 accounts registered to a mailing address.

When it comes to social media, the average user has accounts on 6 or more platforms.

Modern scoring systems allow you to find social media by email. Also determine the presence of accounts on other resources. 

Their absence may indicate that the email was registered recently. Perhaps for the purpose of fraudulent loan processing.

User photos

User avatars on social media linked to an email address are another informative source of alternative data.

Lenders are able to compare the images they find and determine whether they belong to one person or different people.

This is possible thanks to the advanced Face Recognition technology.

If the photos differ, it suggests that the loan application may be linked to a fictitious identity - a made-up person using a mix of real and fabricated information.

The age of the email

Fraudsters often resort to creating disposable email addresses to apply for loans. This allows them to hide their real data.

Therefore, it is important to determine the age of the address when deciding on a loan application. 

Email deliverability

This information allows you to determine if the email address is actually active. 

If the email is not delivered, this is a red flag. The email address may not exist or may have been blocked.

Domain data

Analyzing a domain provides a lot of information useful to a lender. 

This includes being able to identify disposable, free domains, and suspicious top-level domains.

The presence of an address in certain databases

By checking your email address, you can determine if the address has been added to a spam list. This may indicate that:

• the owner of the mailbox is engaged in illegal activity
• or the mailbox has been accessed by scammers

Another source where the specified email might be found is a database of addresses linked to data breaches.

On the one hand, this is a negative fact. After all, the stolen data could be used for fraudulent purposes. For example, to create a fraudulent identity.

However, the fact of data leakage confirms the mailbox's activity.

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How to check the age of an email address

Determining the age of an email address is important for lenders. 

An older email address suggests greater reliability, making it safer to engage with the applicant. Consequently, the likelihood of default is typically lower.

You can determine the age of an email address using several methods. To learn more, be sure to check out our previous article, where we cover the topic in detail.
Here, the 5 ways to learn the age of an email. 

#1. Checking the date of domain registration

This information can be manually found on specialized resources – for example, on who.is. To do this, enter the name of the domain on the site, and you will immediately get information about the date of its creation, renewal, expiration, and other data. 

#2. Social media lookup by email

Look for accounts that are registered to an email account. Some sites, including social media, display the date the user registered.

#3. Analyze email data

According to statistics, the average email user encounters data breaches at least three times. 

Using specialized databases, a lender can determine the fact of leaks. 

This will prove that the mailbox was created a long time ago. 

#4. Comparison of data

Compare data from different sources. For example, the date of domain registration and social network account creation.

#5. Google Dorking

This method allows you to collect information from public servers using search engines. Various search operators are used for this purpose.

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Purposes of email verification in credit scoring

Risk managers use email address verification for two key objectives.

Risk assessment

The email check identifies:

1. Reliable borrowers without credit history.
2. Potential defaulters. 

A high risk level may be assigned to applicants with:

• an inactive email
• no accounts registered to the address
• different avatars in the found profiles

Fraud prevention

Detecting freshly created mailboxes as well as blacklisted or spammed addresses can help.

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How lenders can benefit from email lookup

Email searches provide lenders with these options:

Identity verification. An email search allows for an advanced verification of the applicant's identity. 

Enhanced email account evaluation. This verification helps you determine if the address listed on the loan application is real. You can also determine if it belongs to the applicant.
Optimized networking and lead generation. Email search helps you identify the most reliable customers and partners. This is relevant if your organization is interested in expanding its target audience or partner network.

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Email lookup with RiskSeal

The RiskSeal Digital Scoring System checks the identity of potential borrowers using their email addresses. These checks give our clients hundreds of useful insights to help them make better decisions.

Extensive database. A key feature of RiskSeal is our extensive database, built from thousands of identity checks. If an email address has already been verified in our system, we inform the lending organization's risk manager. This helps them see if the applicant has applied for loans elsewhere.

Effortless risk management. Another benefit of our platform is that it's effortless for users. Just provide the applicant's email address, and we take care of the rest. This makes default prevention easy and effective.