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How Tech Can Help to Drill Down Past Credit Report

The last year painfully illustrated the dilemma most credit unions have been facing for some time now. Even when financing becomes available, finding qualified individuals is about as daunting of a challenge today than at any time in recent history. The slightest imperfection in a credit report can derail a loan process.

However, financial institutions shouldn't take a credit report's conclusions at face value and show prospects the door, because chances are they leave money on the table when they do.

Take Nothing at Face Value

In most instances, credit union loan specialists simply request credit reports from the usual suspects to see if an applicant's score is high enough to qualify for a specific loan. Very rarely does the service provider have the time to analyze the documents in detail for what often times are inconsistencies or errors that, if corrected, would qualify that individual for financing.

This might not have been a large issue five years ago. Today's a different story; simply taking credit reports at face value could mean that qualified applicants walk out the door without the loan officer even knowing it. Now more than ever, CUs need to expand their analytics capabilities to uncover any and all opportunities for new deals.

Technology to the Rescue

Herein lies the dilemma. No loan officer, or credit union, for that matter, possesses the resources to spend the required amount of time to comb through reems of paper in order to find every single questionable entry in a report. Such processes, while beneficial, must be automated in order to be of true value.

To do this right, loan officers should consider leveraging existing Web-based systems that can perform "credit proof reading," identifying potential data errors and offering steps to rectify these discrepancies to quickly increase an applicant's score. Doing so affords credit unions and underwriters a better understanding of a person's actual credit potential, and enhances the financial service professional's closure rate, operational efficiency and sales pipeline.

There are many different options from which to choose, but the more beneficial solutions include:

  • Identify ways to legitimacy and permanently raise an individual's credit score within 72 hours.
  • Resubmit the applicant's information for rescoring during that same three-business day period.
  • Integrate with other systems that can help declined applicants sign up for self-paced programs to help them raise their scores with the intent on reapplying once they can qualify.
Benefits Abound

Uncovering new sales opportunities notwithstanding, such tools can provide credit unions additional benefits, including:

  • Providing additional revenue streams by taking unqualified candidates and offering them turnkey services at a flat-rate fee to help improve their credit scores.
  • Increasing the sales pipeline turning prospects that may not qualify at present into potential customers within a year.
  • Improving customer services, thereby raising referral and retention rates.
  • What's more, elevating customer and consultative services will be the new standard for loan officers and their credit unions as the economy turns around. Consumer lending and spending habits are changing, and while the availability of credit will rise in the coming months, consumers will be looking for partners who can provide valued services beyond the actual transaction. However, that won't mean the return of ample support staff; competition will be too fierce to support such overhead. Instead, technology platforms will be essential to making this happen.
William DiPaolo is the Managing Partner of Cogent Road, a technology company focused in helping financial institutions improve their ability to identify qualified loan candidates. He can be reached at william.dipaolo@cogentroad.com.

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