How Much Can Your Credit Score Really Swing?

CreditXpert rocked the industry when we shared consumer research that showed nearly 70% of all borrowers could increase their credit scores by at least one 20-point credit score band in about 30 days just by taking a few simple steps. When offered the chance to take these steps — which could include paying down a balance, closing an account, or shifting a balance to another card — nearly 70% of potential borrowers said they would follow through with the plan when asked by an independent research company. 

This is great news, better than many people realize. Remember, we found consumer credit scores so mobile they could move up at least one band. This raised some questions among our data scientists: how mobile are these scores? How high could they go? 

They dug into the data and this is what we found. 

Finding the rest of the story

CreditXpert’s marketing and sales teams have been preaching the power of Credit Optimization to the industry for the past few years. If it’s this easy to help borrowers get a better deal on their next mortgage, the industry has a moral obligation to help them do it. But in the process, we glossed over one of the most important data elements. By putting at least in our marketing, we have hidden the real consumer data we uncovered. 

When our data scientists dug into the 1 billion plus mid-score credit reports that were used to develop our algorithm, they came back with more precise numbers, which we are happy to share with you now. When we consider the 70% of all borrowers who have some mobility in their credit scores, we find that about one-third of them can raise their credit score by one 20-point band.  Another 21% can raise their score by 2 20-point bands. 

Finally, a third set of borrowers, making up about 16% of all those who can raise their score, can raise their scores by 3 or more bands. There we go again. 

Without getting too deep into the math (too late!), we’re saying that the data indicate that 37% of the 70% of borrowers who can optimize their credit scores can do so by two bands or more. 

Why this is great news for the industry

While increasing an applicant’s credit score by one 20-point band is good, more is better for at least two reasons: 

First, this increased opportunity should get more lenders to admit that consumer credit scores are mobile because they see the value in helping them increase their scores. For more on this, see any of the posts we’ve published about how higher credit scores mean lower LLPAs and higher lender profits. To learn more about LLPAs, download our white paper. 

Secondly, and perhaps more importantly, it brings home the point that the industry can no longer consider the consumer’s credit score a fixed element of the deal.. This means lenders have the ability to do a better job for at least 70% of the borrowers they serve. 

Credit Optimization works, better than most lenders believe. We probably should have been making a big deal out of this from the beginning. You can bet your borrowers will.