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New research from Veda has recorded a 72 per cent increase in the number of credit checks executed by mortgage brokers in the past three years.
Veda’s general manager of consumer risk, Angus Luffman, said brokers were increasingly checking applicants because the benefits of doing so far outweigh the costs.
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Mr Luffman pointed to Veda modelling that has shown that credit reports enable brokers to lift their completion rates and effectively close more deals and positively impact their bottom line.
“The return when a broker incorporates credit checking into their process was recently assessed to be 52 times the initial investment,” he said. “This return on investment includes both revenue from increased conversion rates and cost savings from lower processing times.
The benefits from credit checking extend beyond return in investment — the end customer ultimately wins from a better customer experience.”
Credit reports allow brokers to match an applicant to the optimal lender based on externally verified credentials, Mr Luffman said, adding that brokers can therefore direct borrowers to lenders that are more likely to approve them, or understand they are likely to be declined early on.
More broker groups are now introducing credit checks as part of their compliance program, as well as streamlining their use of external data sources. Many broker groups also pay for credit checks as part of their service.
Mr Luffman said mortgage brokers will be one of the first groups to benefit from the additional insights that comprehensive credit reporting data contributes to credit reports.
“These additional insights will not only help secure the appropriate deal but also ensure responsible lending obligations are met,” he said.
In March, Veda partnered with AFG to make it easier for brokers to perform credit checks and better match potential borrowers with appropriate mortgage products via integration with AFG’s FLEX platform.
Veda has also integrated its credit reports into a number of loan management platforms such as SymmetryCRM.
