The number of credit checks performed by mortgage brokers has surged by 72% in the past three years, according to a leading credit analysis company.
Data from Veda indicates that the number of credit check applicants coming through the third party channel is now at record rates, and is translating into higher completion rates for brokers.
“Veda modelling has shown that credit reports enable brokers to lift their completion rates, allowing them to close more deals and positively impact their bottom line,” Angus Luffman, Veda’s GM of consumer risk said.
“The return when a broker incorporates credit checking into their processes was recently assessed to be 52 times the initial investment. This return on investment includes both revenue from increased conversion rates and cost savings from lower processing times.”
Luffman said more broker organisations were introducing credit checks as a part of their compliance program, as well as streamlining their use of external data sources. He said this allows them to build a more complete picture of a consumer’s financial circumstance, assist in matching customers to best fit lenders and reduce application process times.
“Mortgage brokers will be one of the first groups to benefit from the additional insights that Comprehensive Credit Reporting (CCR) 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 entered a partnership with AFG to make it easier for brokers to perform credit checks and better match potential borrowers with appropriate products.