Employment verification is crucial for employees seeking to take out a line of credit, such as for a new vehicle or home purchase. However, conducting employment verification isn’t always straightforward. In addition to confirming information, teams must ensure employee data is secure and only the necessary information is given out. That’s why businesses turn to third party employment verification companies to streamline this process.
Understanding the Importance of Employment Verification
The Significance of Accurate Employment Verification
Accurate employment verification is beneficial in numerous ways. Let’s take a look at how this process benefits lending companies:
- Income Verification: Lenders need to ensure that the borrower has a stable source of income to repay the loan. Verification of employment helps confirm the borrower’s income and provides assurance that they have the financial means to meet their loan obligations.
- Risk Assessment: Lending institutions evaluate the risk associated with lending money. Verifying employment history and income helps lenders assess the borrower’s financial stability and determine the likelihood of repayment. A consistent employment record and sufficient income reduce the risk of default.
- Loan Eligibility: Different loans have specific eligibility criteria, including income requirements. Employment verification helps lenders determine whether the applicant meets these criteria and is eligible for the loan.
- Loan Approval: Verification of employment is often a prerequisite for loan approval. Lenders want to ensure that the borrower is creditworthy and can manage the loan responsibly. Proof of employment is a key factor in this assessment.
- Loan Terms and Conditions: The terms of a loan, such as interest rates and repayment periods, can be influenced by the borrower’s financial profile. Employment verification helps lenders tailor loan terms to the borrower’s financial situation.
- Debt-to-Income Ratio: Lenders use the borrower’s debt-to-income ratio to gauge their ability to handle additional debt. Employment verification contributes to the accurate calculation of this ratio, which is a key factor in loan decision-making.
- Regulatory Compliance: Lending institutions often need to comply with regulations and industry standards. Employment verification is a part of these compliance requirements to ensure responsible lending practices.
The Role of Third-Party Employment Verification Companies
Third-party employment verification companies have become an indispensable resource for many organizations. By leveraging their capabilities and secure systems, companies can streamline employment screening verification, relieve the burden from their HR departments, and reduce corporate liabilities.
Benefits of Using Third-Party Employment Verification Companies
Curious about the benefits of using third-party employment verification services? Here are some key advantages.
Time and Cost Savings
Third-party employment and income verification services save a significant amount of time and financial resources. Managing and accurately distributing this sensitive employee information in-house is time-consuming, just like it would be to perform background checks. A verification service provider already has the systems, organization, and best security practices to streamline this process for you.
Mitigation of Legal Risks
Legal compliance can be tricky to navigate. A good third-party employment verification company ensures that everything is conducted legally, minimizing any chance of legal implications. In addition, with a trusted partner like Vault Verify, you can have peace of mind knowing that once the information is sent to the right party, it’s removed from our systems permanently.
Real-Time API Integration
Real-time API integration ensures you have the most accurate and up-to-date employee data. At Vault Verify, we offer real-time API integration with most payroll and HRIS systems, including Ultimate, Ceridian, Workday, Paylocity, and more. Plus, service, setup, training, and implementation are completely free.
About Vault Verify
If you’re seeking a third-party provider to handle income and employment verification requests, look to Vault Verify. Our employment verification service streamlines the process of confirming a team member’s employment history and qualifications, saving your in-house team time, money, and resources.
A defining feature of our service is our prioritization of data security. In the field of employment verification, it’s common for companies to download and share a complete set of employment history data with VOE/VIO providers each pay period. However, since only 1 in 5 employees on average request a verification each year, only about 1% of that data is needed. Duplicating a company’s payroll data in a third-party system is inherently insecure and exposes a company to unnecessary risk of data exposure.
At Vault Verify, we provide real-time interfaces with multiple payroll systems to create secure and robust employment verification programs for our clients. Our system takes data security even further by redacting personally identifiable information after 30 days and removing it entirely from our systems after 90 days. Vault Verify uses a company’s personnel information only to provide verifications of employment and income. Then, the information is never stored or kept in our systems.
If you’re seeking a secure, speedy, and reliable employment verification solution, look to Vault Verify. Our 99% client retention rate demonstrates our commitment to putting you first. Request a sales demo today to get started.