3 Ways to Help Clients Raise Their Credit Score

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The spring homebuying season is upon us, and there are few signs that the real estate market will settle down from last year’s roller-coaster ride. Rising home prices will limit most house hunters’ choices, and higher interest rates will decrease the amount they can afford. These are the top three things you can do to help your clients afford the home of their dreams.

1. Encourage clients to start thinking about financing early. Consult the Credit First Guide to Mortgage Lending, which includes lots of tips on how home buyers can ensure they are in the best possible situation to get the loan program that is best for them.
2. Educate clients about how their credit score will impact their ability to buy a home. Credit score awareness is at an all-time high, but not all credit scores are the same. The scores your clients are likely tracking are not the same scores mortgage lenders will be using to determine credit worthiness. We just published a blog post that explains how credit scores will impact your client’s ability to purchase a home.
3. Work with mortgage lenders who can help your clients identify their credit potential. We’re not talking about credit repair or credit counseling here, which are tactics often used for those who need considerable help with their credit. CreditXpert, for example, uses highly accurate predictive analytics to show mortgage applicants precisely how much they can better their score in 30 days if they complete a custom action plan. Seventy-one percent of applicants who have a credit score below 760 can improve their score after completing the recommended action plan.

The Mortgage Credit Potential Index (MCPI) outlines the impact a better credit score can have on a prospective home buyer’s mortgage application. Below are some important data points from the January 2022 index.

• Qualifying for an FHA mortgage. Fifty-two percent of FHA borrowers—or 711,000 people—with credit scores below 579 may be able to achieve a score of 580 or higher within 30 days if they complete a custom action plan.
• Qualifying for a conventional mortgage. Forty-three percent of conventional borrowers—or about 1.4 million people—with credit scores below 619 may be able to get to 620 or higher within 30 days if they complete a custom action plan.
• Increasing purchasing power. Thirty-nine percent of all mortgage borrowers—or about 2 million people—with credit scores below 679 may be able to achieve 680 or higher within 30 days if they complete a custom action plan.
• Qualifying for a better rate. Sixty-eight percent of all mortgage borrowers—or about 6.3 million people—with credit scores between 640 and 759 may be able to increase their score by at least 20 points within 30 days if they complete a custom action plan.

The bottom line: Optimizing credit scores is one of the most impactful short-term moves a prospective home buyer can make to ensure they qualify for the best loan program and lower the overall cost of homeownership. Consider asking your lender partners to use CreditXpert when evaluating your clients’ creditworthiness.

CreditXpert was founded in 2001 with a mission to make homeownership more accessible and affordable to all. The company’s predictive analytics platform helps mortgage originators and applicants realize the borrower’s credit score potential by generating a highly accurate and detailed action plan. Since its founding, CreditXpert’s platform has analyzed more than 750 million credit records. Today, most of the top 10 mortgage originators and more than 60,000 mortgage professionals leverage the CreditXpert platform.