CreditXpert differentiates itself in the industry by providing innovative solutions that emphasize credit optimization rather than traditional credit repair. In this executive conversation with Vice President of Marketing Mike Darne, we explore how CreditXpert delivers precise credit optimization solutions and their commitment to making home ownership easier and more affordable.
Housing line: CreditXpert brings value to people through credit in a very special and interesting way optimizationwhich is different from credit repair. Can you explain the difference between the two?
Mike Dahn: This is a question we often get from people who have never used CreditXpert products like Wayfinder or What-if Simulator. People using our tools can intuitively understand the difference. I think the best way to explain how credit repair differs from credit optimization is to focus on three key areas: relevant audience, time frame, and certainty.
Let’s start with relevant audiences. I’m referring to the number of mortgage applicants who could benefit from credit repair or credit optimization. We find it difficult to obtain reliable statistics on the number of mortgage applicants who could be helped through credit repair. That said, we think it’s best suited for subprime loan applicants who may have significant mistakes on their credit history. When you look at it this way, those who could benefit from credit repair represent only a small portion of those seeking a mortgage. Credit optimization, on the other hand, is suitable for a lot of A larger portion of people seeking mortgage loans. Our data shows that over 70% of people seeking a mortgage can improve their credit score by at least 20 points in just 30 days. This applies to those with credit scores ranging from subpar all the way up to super prime applicants.
The next key difference between credit repair and credit optimization is the time frame. This is especially important in today’s market, where low inventory requires homebuyers to act quickly. Credit repair is often a lengthy process that can last several months. Such lengthy time frames are largely caused by back-and-forth communications with creditors and authorities. However, credit optimization can produce meaningful changes in 30 days or less. Because credit optimization leverages powerful predictive analytics to highlight the specific actions needed to reach a target score, the time frame is largely in the hands of the applicant. This makes credit optimization a valuable tool for those who want to move quickly.
The final difference is certainty. Credit repair companies perform manual reviews of applicants’ credit files and look for inaccuracies that may be disputed. While this points out an inaccuracy, it does no Provide reliable insights into the impact that correcting these inaccuracies will have on an applicant’s credit score. Credit optimization, on the other hand, is rooted in predictability and accuracy. Because Credit Optimizer leverages sophisticated predictive analytics to run hundreds of simulations in just seconds, applicants will know exactly what actions they need to take to reach their target score and Likelihood of achieving desired results. This is especially important for sponsors as it allows them to recommend credit optimization with confidence that their applicants will achieve the required target score.
We are a company dedicated to making housing more accessible and affordable for all.
hardware: What makes credit optimization such a powerful asset for LOs and homebuyers? Is this something that everyone can benefit from, or is it more beneficial for LOs of homebuyers within a certain credit score range?
Medical PhD: As I mentioned, over 70% of mortgage applicants improve their scores by at least 20 points within 30 days. There is a significant portion of the population that could benefit from credit optimization. But when you break that number down into outcomes, we find that specific segments of borrowers benefit from credit optimization in different ways. Let’s start at the low end of the credit spectrum. We know that 53% of people who may be initially rejected because of a low credit score may reach the point of qualifying in as little as 30 days. For these borrowers, simply qualifying for a mortgage can be life-changing. This means they will have the opportunity to start building wealth that may eventually be passed on to future generations.
We are very proud of how our technology is helping these borrowers. However, for those who already qualify for a mortgage, the impact could be just as significant. Our data shows that about 70% of people who qualify for a mortgage can get a lower interest rate through a higher credit score. A higher credit score may result in lower premiums. For those who pay private mortgage insurance Let’s assume a person with an initial credit score of 640 wants to borrow $360,000 with a loan-to-value ratio of 90%. Our predictive analysis shows that LO working with this borrower could improve their score by 40 points in just 30 days. A higher score would lower their interest rate by 65 basis points, resulting in savings of $158 in principal and interest, as well as $131 in monthly private mortgage insurance premiums. This all adds up to nearly $75,000 over the life of a 30-year mortgage. In the same situation, the lender would also benefit from a $1,800 reduction in LLPA premiums.
hardware: Being proactive is one of the most important factors for success in the current market. How is CreditXpert currently helping lenders and real estate professionals stay proactive?
Medical PhD: You’re right; lenders and real estate professionals who are proactive in such a competitive market will ultimately stand out. We know from our research that most borrowers shop around to find the most suitable lender by applying to multiple lenders. For many people, it’s all about the rate, but they also want to work with someone who will look out for their best interests and be a trusted advisor. After all, for most people, buying a home is probably one of the most important investments they will make in their lives. Lenders that move forward and make credit optimization part of their core offering may win on both fronts. They will be able to offer the most competitive rates and loan programs and demonstrate that they are doing everything they can for their borrowers.
hardware: Which investments in technology and artificial intelligence have proven to be the most beneficial and productive? What are you investing in and/or focusing on now to grow?
Medical PhD: For over a decade, we have exclusively offered Wayfinder and What-if Simulator credit optimization tools through credit reporting providers. Three years ago we began developing a cloud-based product that combines the best of both tools to enable lenders to extend credit optimization across their operations. We launch this new cloud platform in 2023 and upgrade lenders before retiring Wayfinder and What-If Simulator on October 1, 2024. Opportunities, improved workflows and streamlined processes for applicants. We are also committed to supporting the latest models and requirements that will be launched in 2025.
hardware: Your company’s mission boils down to “helping people.” How do you see this task being implemented next year? How about a little further down the road? How are you going to help people five to ten years from now?
Medical PhD: You’re right; we are a company dedicated to making housing more accessible and affordable for all. In fact, when we poll our employees, our mission is their top reason for joining CreditXpert. When you take that mission statement and make it applicable within our direct sphere of influence, we are committed to ensuring that every mortgage applicant has the opportunity to optimize their credit score by 2026. An important goal and ambitious goals for us and the industry as a whole.
While many of the industry’s largest originators are currently using CreditXpert’s credit optimization tools, more needs to be done. Specifically, we are committed to putting the best, most accessible technology in the hands of all sponsors. This includes refining our predictive analytics to highlight opportunities early in the process. We will also work to increase consumer awareness of credit optimization. In a 2023 study we conducted of mortgage holders and seekers, we learned that credit optimization gives applicants a sense of empowerment, increases transparency into the process, and reduces stress. Our team understands they have an opportunity to make homeownership more accessible and affordable for all, and are excited to bring positive change to the industry.
