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Experian partners with Finicity to digitize mortgage underwriting

Could expand credit opportunities for 64 million "credit invisible" consumers

Aiming to make the mortgage process easier for lenders and consumers alike, Experian announced that it is partnering with Finicity to digitize the mortgage underwriting process.

According to Experian, the partnership will allow loan approvals in as little as 10 days, and open up the credit box to roughly 64 million consumers who have limited or no traditional credit history.

Through the partnership, consumers can also provide income and asset information to lenders digitally through Finicity’s more than 16,000 integrations with financial services institutions.

For consumers, the partnership can “save hours of hassle completing onerous paperwork,” the companies said.

For lenders, the partnership brings automated, paperless income verification system and “instantaneous” asset verification.

“Our goal is to make the loan process far easier for consumers and to provide better information for lenders through easy-to-use, fair and transparent digital and mobile experiences,” said Alex Lintner, Experian’s president of Consumer Information Services. “By working with Finicity, we will deliver more timely detailed information through smooth, safe processes for credit grantors to improve their business and dramatically enhance lending experiences for consumers by using the power of data.”

The companies also note that the partnership could increase credit availability to consumers with limited credit history.

“Experian and Finicity’s partnership also will benefit the approximately 25% of the U.S. population with limited or no credit history, including millennials, who are the largest segment of the workforce and are increasingly applying for loans,” the companies said in a release. “While these consumers may have a limited credit history, most consumers have a checking and savings account, as well as other payment obligations such as rent, and utility and phone bills, which can demonstrate they are capable of repaying a loan.”

According to Experian, the partnership will have significant benefits for the mortgage market.

Per Experian’s data, it costs $42 billion per year to process mortgages. The credit agency boasts that the partnership could cut the cost of processing mortgages by 20%.

Finicity also notes that it is currently taking part in a pilot with Fannie Mae to take part in the government-sponsored enterprise’s “Day 1 Certainty” program, which offers lenders protection from loan buybacks by using automated underwriting as well.

“Together with Experian, we’re reimagining the way the financial industry views credit decisioning, while also broadening credit inclusion for consumers,” said Steve Smith, CEO of Finicity. “Digitizing the credit decisioning process will improve the experience for lenders and borrowers while enabling further innovation in the lending space.”

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