McKenna mentioned zombie debt is a matter that Level Predictive hadn’t seen till now. The time period refers to unhealthy debt that is so outdated it’s uncollectible and has disappeared from credit score reviews. A credit score restore firm will purchase any person’s stale debt and resurrect it on the credit score report of a buyer as a “totally paid” merchandise. Abruptly, due to zombie debt, the buyer seems to have a greater cost historical past.
Knowledge furnishing exploitation has been round for years however has not too long ago turn out to be extra widespread, McKenna mentioned. The scheme entails corporations mendacity to credit score bureaus that they’ve given a shopper a mortgage and are receiving funds or had the debt paid in full.
“Artificial identification is an limitless cat-and-mouse recreation,” Level Predictive wrote. “Simply as auto lenders catch on to 1 scheme and react, a brand new loophole within the system is recognized by the mouse and exploited.”
“Credit score washing” — bettering unfavorable credit ratings by pretending that detrimental credit score report commerce strains are the results of identification theft — additionally grew considerably in 2022, taking pictures as much as 0.5 p.c of functions from an estimated 0.3 p.c. In reality, some lenders informed Level Predictive they believe as much as 98 p.c of their identification theft instances are actually credit score washing.