Magazine article American Banker

Credit Score Helper in Tests

Magazine article American Banker

Credit Score Helper in Tests

Article excerpt

Cogent Road LLC, a San Diego software company, has created a credit "proofing" program for mortgage lenders to help customers increase their credit scores so they can qualify for better rates and terms.

Alan Baia, Cogent Road's president, said the Avail program was designed for mortgage brokers, bankers, and loan officers "to serve an advisory role" in the mortgage process. It gives step-by-step instructions on how people can improve their credit score by paying off certain accounts or fixing errors on a credit report.

Avail is being tested by some users of Funding Suite, Cogent Road's software for ordering and analyzing credit reports. The program is intended to compete against the credit-repair companies that typically charge consumers $100 to $150 to generate a credit report. Mr. Baia said the credit bureaus offer free credit reports but "don't do anything except tell the consumer whether their score has changed."

Many prospective first-time homebuyers are waiting on the sidelines watching real estate values drop, he said. Lenders can use the program to help those people improve their credit "early in the process."

"What we see now is the consumer feels lost and fearful because they don't understand their [credit score] number," Mr. Baia said. "This is a tool for the mortgage broker or loan officer to educate the homebuyer and close more loans and get repeat business in the process."

Credit reports are "the first cost component in the mortgage process and the first disqualifier," Mr. …

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