Experian and Finicity have joined together to make it easier for consumers to apply for a loan, accelerating loan underwriting and broadening loan availability.
The new technology also improves accuracy and reduces fraud risk for lenders. Experian’s new Digital Verification Solutions will deliver verification of assets and verification of income leveraging Finicity’s data aggregation and insight platform. Experian is the first credit bureau to implement this technology, which will give consumers the opportunity to secure mortgages as well as other types of loans with less paperwork and hassle by connecting with financial institutions digitally.
As part of this effort to bring a “frictionless” loan process into the lending marketplace, Finicity is in a pilot with Fannie Mae to become an eligible asset verification report supplier for the DU® validation service, part of Fannie Mae’s Day 1 Certainty offerings. Fannie Mae’s new Day 1 Certainty initiative is a landmark advancement within mortgage lending in which lenders can validate loan application data including income, assets and employment upfront. The benefits include freedom from representations and warranties, more efficient risk management and a streamlined process.
By digitizing the end-to-end mortgage process, loan approvals that take as long as 70 days, may be approved in as little as 10 days. With Experian’s industry-leading credit decisioning and Finicity’s account insights technology, consumers can rapidly complete the income and assets verification process through a simple digital experience. Consumers will then permission delivery of appropriate account data, which is pushed to Experian’s Decisioning as a ServiceSM hosted platform. This will give lenders the ability to integrate consumers’ account data into their credit decisioning processes. As a result, lenders and other service providers will assess a consumer’s ability to pay and verify borrower income and assets in a manner compliant with the Fair Credit Reporting Act (FCRA).
In addition, consumers will no longer be burdened by the laborious task of providing paper-based verification documents during loan underwriting. Lenders will receive deeper financial information on prospective customers through real-time access to alternative data on a customer’s assets, income and ability to pay.
“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.”
Experian and Finicity’s partnership also will benefit the approximately 25 percent 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. 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.
“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.”