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Special Reports
Credit Restoration
Tech Helps Consumers Manage Credit
Taking advantage of legitimate options.
By Amilda Dymi
At least one credit expert maintains in the current highly credit-sensitive market
that technology can help lender, broker and borrower users optimize credit and increase the number of loans that
go to closing. "Managing your credit usage overall, that is something typically people do not do very well
proactively," said David Chung, interim president and vice president of business development at CreditXpert
Inc., a provider of "highly personalized" credit management tools based on credit stimulation, optimization
and analysis. "Technology helps users manage credit better and it helps lenders do better in the marketplace."
Most individuals can take various steps to improve their credit score in a very quick fashion, Mr. Chung said.
One of the biggest credit score factors being utilization, since customers have direct control over how they use
their credit. Educating borrowers on how to restructure credit usage is a decisive factor in the so-called credit
repair process. "How you're using your credit right now, how you're managing your credit, is something people
do not do well technically, because they don't know what they should be doing, what they should not be doing,"
he said. "The dynamics of credit scores is such that it varies per person and per person's case because there
are other factors coming to play. People should take advantage in the advantages that are inherent in credit scoring
and utilize it to optimally manage their credit in a person by person basis."
For example, he said, there are ways to improve one's credit score by simply taking advantage of legitimate options
such paying down debt, transferring balances and opening a new account. Such solutions are effective "because
these are things you can do right now," he explained, compared to other measures and action that offers long-term
credit repair solutions.
Technology provides new business opportunity for lenders and brokers, and credit agencies build stronger customer
relationships and retain their customer base.
For example, CreditXpert offers among other products, the Plus Score, developed by Experian, based on over 30 years
of credit reporting data, including U.S. consumer habits and advanced analytic resources. It helps customers "see
what factors in their credit report may directly influence their credit score" and allows consumers to understand
how credit scores work. "In the current shrinking marketplace the hurdles are higher, so to speak," he
said. "Requirements for credit scores are only going to go up. "However we will find ways to help people
either to address problems with their credit data, or through optimizing or better managing their credit, and finding
the best patch of an individual's credit score so that lenders are able to approve more borrowers."
Moreover, he added, beyond the approve-decline challenge, lenders need to screen what type of products certain
customers can qualify for. "It opens the door to offering applicants either a more compelling option that
is more likely to get them to be approved, which is a very critical part of the business sometimes people overlook,"
he said. "One of the steps lenders overlook when screening borrowers is the ratio, or percentage of the offers
they make are actually accepted by the customer and go to closing."
According to Mr. Chung, "HUD data suggest that a significant percentage of the offers extended by lenders
are never accepted."
Reasons may vary to include affordability or in the case of the more sophisticated borrowers, a need to exhaust
all the other options made available by other lenders and brokers, or in more generic terms, competition. "Here's
where we come in," he said.
The company assists lenders in "identifying opportunities," either to improve someone's probability to
get approved, or by finding the best match product that the client will accept. "And that is why we try to
build our products in a very customer friendly language - to help the lender communicate better with the borrower,"
he said. "It is of critical importance. Customer education is very important."
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