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Giving credit where credit is due
Real estate innovator: CreditXpert helps home buyers
get best mortgage rate
By Janis Mara
Inman News
Maryland mortgage broker Carl Delmont hates having to
disappoint a client. So when he heard about CreditXpert,
which can help applicants get better interest rates or
loans they might not otherwise get, he decided to try
it. Nearly seven months later, he's glad he did.
Delmont, who founded Hunt Valley, Md.-based Freedmont
Mortgage in 1993, said he has used CreditXpert for 400
to 500 clients since he first began using the tool in
December 2004. The tool has helped many of them get a
better deal, he said.
"Say an attorney sends a client to me and I give
the client a 5.25 percent mortgage interest rate, well,
big deal. That's what I'm supposed to do. But if I show
him that he had a low score and I was able to bring it
up and get a lower rate, that makes a big impression.
"We've always branded ourselves more as experts
than our competitors," Delmont said. "This
is the best arrow in our quiver."
Sometimes the software can identify a problem with a
quick fix that can take as little as a few days, he said.
Often, a consumer must take action and wait for his or
her to score to come up over a few months' time.
Delmont can use CreditXpert to show clients how to improve
their score by setting problems straight – such
as wiping out credit card debt – or by changing
credit habits long-term. He also can show them how much
their score would increase if a certain problem was eliminated,
or he can find inaccuracies in a report using CreditXpert
Detective, which launched in February.
This tool scans an individual's credit data to reveal
potential inaccuracies and recommend specific updates
that will most significantly improve the person's credit
score. It also automatically generates customized instructions
and dispute letters for fixing the problem.
The product enables loan officers to check applicants'
credit to see if any errors or omissions are holding
down the credit score, said David Chung, interim president
and vice president of business development.
Another product, the CreditXpert Simulator, shows brokers
and their clients how much the applicant's credit score
would go up if certain problems were removed.
"We had a Realtor who had a small collection against
her," Delmont said, meaning that a debt the Realtor
owed had been referred to a collection agency. "We
ran the CreditXpert simulator, taking the collection
off, which showed us how much her score would go up without
that problem.
"She proved the debt wasn't hers, and a week later
her score went up above 680 and she was able to purchase
an investment property she wanted," Delmont said.
The grateful Realtor has since referred 11 clients to
Freedmont Mortgage, Delmont said.
"Our referral business has increased since we began
using CreditXpert," Delmont said. "It's helped
us to generate business with referral sources, whether
it's financial planners, real estate agents or attorneys." Delmont
couldn't give a dollar figure as to the amount of
increased income.
Chung came up with the idea for CreditXpert
when
he realized how mysterious the credit scoring
process is to most consumers. He was working at a company
doing custom modeling and consulting for financial
services companies, building different scoring
models.
"We were consulting with major lenders to help
them make better lending decisions. We realized the borrowing
community wasn't aware of any of this. It was all shrouded
in secrecy," Chung said. "Friends and family
would ask us questions and we would give them guidance
when they were applying for loans." Chung realized
this would be helpful to others as well.
Because people often don't know how to establish a good
credit rating, it's harder for them to do so, Chung pointed
out.
A recent study revealed that U.S. consumers lack important
information about credit scores. Some 62 percent don't
realize that a score above 620 out of 850 is necessary
to secure the most favorable mortgage rate, for example.
And only 42 percent knew that payment history was a critical
determinant to a credit score.
"If you let the consumer know what proper behavior
is, they are more likely to do that, especially if it
ties into better rates and saving money," Chung
said.
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