Attempting income verification using pay stubs amplifies unfairness

In the Fall of 2023, a hard-working couple pleaded with the online community for ideas. “Help,” wrote the frustrated pair. “My girlfriend and I earn most of our income in tips. How does anyone in the service industry rent an apartment???” Since pay stubs fail to account for tip income, this deserving couple found their applications to rent an apartment repeatedly rejected.

This example illustrates the bias inherent to relying on pay stubs to verify income. And it happens to more than just service industry workers. Those earning at least part of their income through freelance work rocketed by over 300% in the last five years. This unfortunate circumstance also impacts those 35% of us with side hustles. Together, they are non-traditional earners boxed into an outdated paradigm.

As we head into the holidays, every one of us involved in reviewing applications can take steps to avoid the unfairness leading to “false negative” rejections that reoccur time and again in the applicant review process. It’s time for a new approach, one that eliminates intrinsic bias and unfairness from the process of verifying applicant income.  

Which do you trust, a pay stub or a bank?

When verifying income, the primary problem with considering pay stubs is that they are easily falsified using undetectable methods, even by the most modern AI-based solutions. Additionally, they offer only a short-term, limited view into an applicant’s earning history: two pay stubs in only one month. Plus, they miss 100% of the tip-based income earned in the service industry, and cannot capture the income earned by independent contractors, case-based employees, or “gig economy” workers. Pay stubs only reflect income from a W-2 based job.

Instead, by reviewing up to a year of financial data, Payscore delivers deep insight into the income stability of applicants, irrespective of how they earn their income.

Safe, accurate, and easy income verification ensures fairness by design

Step out of the old paradigm and into a new world where income verification is defensible, unbiased, and fair. Payscore automates income verification to reveal the truth about every applicant’s financial situation. The incredibly easy “click-to-verify” solution simplifies the entire verification process for both applicant and onsite team and delivers the most accurate income evaluation available. How is this possible? By relying on 100% bank-verified data to confirm both identity and income, Payscore solves fraud, and removes barriers for those struggling to substantiate their earning power.  

Payscore evaluates all sources of income. Your personnel see immediately whether the applicant meets your income threshold, positioning them to make fully informed decisions based on the truth about an applicant’s actual income history.

Payscore empowered teams:

• Ensure each applicant receives the fair evaluation everyone deserves
• Gain defensible insight into both recurring and non-recurring deposits, meaning gig economy and service industry employees, like the couple described above, can put their best financial foot forward
• Avoid the “false negatives” that waste onsite personnel’s time and delay occupancy and the receipt of rent

Onsite teams now complete their work twice as fast, positioning everyone to focus on resident retention and other activities that preserve economic performance.

One of the most valuable benefits Payscore offers is the elimination of a major source of fraud. Even the best AI systems only detect pay stubs that were altered. They have no ability to detect a fraudulent pay stub created with pirated software. Nor will they properly assess documents produced with criminally fraudulent intent using tools like “FraudGPT” … the unfortunate use of software designed to defraud your team. Instead, by directing effort away from pay stubs, and the potential for fraud, Payscore eliminates these risks entirely. What is the outcome? You identify your best prospects automatically, with better information, while reducing the costs and risks that arise from fraudulent applications.

Make decisions on the best available info

Payscore delivers the safest, most accurate, and easiest solution for providing you and your onsite teams with the truth about applicant income. Click here to schedule a demo.