First Payment Default (FPD)

FPD alone may not be a reliable indicator of fraud intent, but it can raise suspicion and prompt further investigation.

Early default refers to a borrower’s failure to make a scheduled loan payment within a relatively short period of time after the loan is issued.

There is no single most effective way of predicting FPD fraud, as lenders typically use a combination of tools and methods such as credit scores, income verification, and fraud detection and prevention software to assess credit risk and detect potential fraud.

Common FPD Fraud types include identity theft, loan stacking, and false employment/income information. Detection methods include credit checks, employment/income verification, and fraud analytics.