Tackling the Wealth Divide by Creating Greater Access to Positive Credit Scores and Loans

The wealth divide in America is a persistent issue that’s only grown in the last 30 years. Inflation, rising real estate prices, and global economic factors (such as the pandemic) certainly aren’t helping matters. 

One area that this dramatically impacts is home loans and, in general, securing residence. There are already affordability challenges in housing across the country, and with rising interest rates and an increase in house prices overall (including rental properties), we aren’t seeing signs of this slowing down any time soon.

How Mortgage Technology Can Help Bridge the Wealth Gap

Fortunately, several companies are creating solutions. They understand that as competition for borrowers is heightened between traditional and non-traditional financial institutions, integrating cross-selling products will become advantageous for building revenue and increasing member retention.

Financial institutions must provide a personal consumer experience, and there has never been a better time to leverage end-to-end consumer and mortgage technology solutions to deepen existing relationships.

The Power of Debt Optimization

Debt optimization is an example of an automated process a financial institution can tap into prior to a mortgage loan closing. This automation analyzes a consumer’s financial data to determine if there is existing consumer debt that can be consolidated or refinanced within the financial institution, allowing the possibility of a lower mortgage loan rate or enabling applicants to qualify for a mortgage that would have otherwise been out of reach.

While this option may not benefit everyone applying for a mortgage loan with the financial institution, there is still an opportunity to cross-sell during the post-closing process. Through the click of a button in MeridianLink’s mortgage loan origination system (LOS), the consumer’s information is automatically populated into the consumer LOS to promote another consumer lending products, such as credit cards, pre-qualified auto loans, and personal loans. 

With this unified approach, financial institutions can work together across product lines to provide their borrowers with more efficient, top-notch consumer lending and homebuying experiences.

Using Rent Payments to Build Credit 

In a move to help millions of U.S. renters improve their credit scores, Experian is offering consumers to contribute qualifying, positive residential rent payments toward their credit with Experian Boost. The intent is simple. When renters are given the opportunity to add rental payments to their credit file, they will see a positive long-term impact on their credit and, therefore, on future borrowing endeavors. Luckily, this technology isn’t just limited to rental payments—other recurring monthly bills can be added to help boost credit scores as well.

Credit inequality is a systemic issue in our nation. But with emerging technologies that help optimize debt and raise credit scores, lenders will have more data to work with, equalizing buying power over time. Positive scores lead to better loans, and better loans lead to more investments in our communities and neighborhoods. 

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This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.