Cutting Costs & Building Business with Prequalification & SmartSelect


Cutting Costs & Building Business with Prequalification & SmartSelect

March 22, 2023
Certified Credit

As a mortgage lender, growing your business and streamlining your expenses can help you stay profitable during slower markets. So, what can you do to drive business and cut costs this year?

By making a few simple, strategic adjustments to your credit report ordering, you can realize significant savings while expanding your business prospects.

In this article, we’ll highlight two powerful workflow optimization tools that can help you do just that: Cascade Prequal and SmartSelect.

Why Cutting Costs and Attracting More Business is So Important in 2023

Lowering your operating costs is always a worthwhile goal. However, in light of the recent credit reporting price increase, it’s more important than ever before. Credit reporting costs are projected to increase this year by up to 400%.[i]

You can limit the impact of this price increase on your bottom line by being more selective about which applicants you run full credit reports on. Rather than using expensive tri-merge credit reports for everyone, you can evaluate applicants more affordably using soft pull credit reports or single-bureau credit reports first.

Cascade Prequal and SmartSelect make this process a breeze. They allow you to separate serious, creditworthy applicants from those who are unlikely to close with you in a cost-effective way. By being smart about your prequalification, you can prevent costly fallout and streamline your loan origination expenses.

These tools can also help you draw more leads into your sales pipeline and forge valuable relationships with them. After that, you can nurture these leads into loyal, lucrative customers.

What is Prequalification?

Prequalification is the process of seeing if an applicant meets your basic credit criteria using their self-reported income and assets, bank account information, and credit reports. Prequalification applications only require soft pull credit reports, which are much more affordable than traditional tri-merges.

Since prequalification results in soft credit inquiries, your competitors won’t be alerted that your applicants are shopping around. What’s more, these applicants won’t have to worry about lowering their credit scores.

Another benefit of prequalification applications is that they’re quick and easy for applicants to fill out. Most applicants can complete the process in a few minutes. After submitting their applications, they can quickly determine:

    • If they’re mortgage-ready based on their current creditworthiness
    • What type of mortgage loan they can qualify for
    • What loan terms and interest rates they can expect to receive
    • The price range of homes they should look for during their home search
    • If they want to choose you as their lender

To that last point, it’s important to note that most house hunters choose their mortgage lenders within two to three weeks of starting their home searches.[ii] Thus, offering prequalification can help you capture the attention of these eager homebuyers before they commit to your competition.

Why is Prequalification Advantageous For Lenders?

While prequalification offers many benefits to prospective borrowers, it’s just as valuable on the lender side. Offering pre-qualification enables you to:

      • Establish relationships with borrowers early on in their home-buying process
      • Increase the number of leads in your sales pipeline
      • Avoid activating competitors’ trigger leads
      • Provide guidance and support to borrowers looking to improve their credit scores

Most notably, prequalification can help you lower your operating expenses by reducing your initial reliance on costly tri-merge credit reports. It does so by pre-screening your applicants’ creditworthiness. Based on this prequalification data, you determine which borrowers need additional help building their credit, who will qualify for a loan product and order a tri-merge, or delay your initial tri-merge report until you are ready to start the origination process. The end result? You won’t waste money on tri-merge orders for applicants who don’t meet your basic qualifications.

The cost savings you enjoy from delaying your use of tri-merge credit reports can make a considerable difference over time. However, prequalification can be complex if you don’t have the right tools. That’s because you must have applicants fill out the required consumer permissions in order to stay in compliance.

Luckily, Cascade Prequal can take care of this process for you. It’s already vetted with the three major credit bureaus and can offer your applicants a consistent experience. Better yet, it generates the required disclosures so you can effortlessly stay in compliance.

Employ Automated Prequalification With Cascade Prequal

Cascade Prequal is an automated prequalification solution that can integrate with your existing LOS. It gives you the power to customize every aspect of your prequalification process, from the loan products you want to show to the credit thresholds your applicants must meet.

To use Cascade Prequal, all you have to do is:

        • Establish your credit thresholds – Every lender’s credit thresholds vary slightly. Luckily, you can customize your credit criteria with ease using Cascade Prequal.
        • Customize your credit report selection – Cascade Prequal lets you decide whether you want to use soft pull credit reports from one, two, or all three credit bureaus. While using credit reports from multiple bureaus can enhance the accuracy of your decisions, using just one can keep your prequalification costs to a minimum. You can adjust your credit report preferences at any time.
        • Implement prequalification on your website – Many modern mortgage borrowers prefer filling out their applications online. Since Cascade Prequal can integrate with your customer-facing website, you can offer them a convenient, digital application experience.
        • Let Cascade Prequal take care of the rest – Once you’ve set your preferences, Cascade Prequal’s automation will automatically pull applicants’ credit reports as soon as they submit their information. After that, Cascade Prequal can compare applicants’ data with your pre-set credit thresholds and generate instant responses on your behalf.

As you can see, Cascade Prequal makes it easy to reap all of the benefits of prequalification without having to put in much manual work.

How Prequalification Can Enhance Your Customer Loyalty

Borrower retention is notoriously low in the mortgage industry. As of 2021, the industry’s retention rate was just 18%.[iii] If your mortgage lending business has a low retention rate, you’re likely losing out on a lot of money. That’s because attracting new applicants takes more time and money than providing repeat services to your established customers.

Cascade Prequal can help you inspire more customer loyalty if you use it alongside our credit score improvement tools. These tools give you access to customized credit score improvement tips that you can pass on to your non-prequalifying applicants. In doing so, you can play a pivotal role in their pursuit of mortgage readiness and hopefully inspire their long-term loyalty.

You can also use these tools to help qualifying applicants boost their scores and obtain even better loan terms and interest rates. If you do, you’ll quickly become a five-star lender in their eyes and earn their business and referrals for years to come.

What is SmartSelect?

SmartSelect is another powerful tool that can help you cut costs. It can automate your credit-pulling workflows so they’re as cost-effective as possible. Here’s how it works:

    • SmartSelect pulls a credit report for an applicant from one credit bureau.
    • If this first credit report’s data meets your credit thresholds, SmartSelect will generate a prequalification report. After that, it can pull additional reports according to your custom parameters. It can also pause the process and let you order more reports when the time is right.
    • If your credit thresholds are not met, SmartSelect will send you the applicant’s credit score and stop the process there, saving you money.

Like Cascade Prequal, SmartSelect helps you achieve cost savings by eliminating unnecessary orders for tri-merge credit reports.

What Credit Thresholds Can You Set With SmartSelect?

Instead of manually mulling through credit reports one by one, you can set your credit thresholds with SmartSelect and let it take care of the tedious credit report review process for you.

Here are a few of the filtering criteria you can customize within SmartSelect:

        • Credit scores
        • Zip codes
        • Collection balances
        • Bankruptcies
        • Delinquencies
        • Unreleased federal tax liens
        • Defaulted loans
        • Foreclosures

Once you’ve set your credit thresholds, you need to select your preferred parameters from the following options:

        • One bureau → two bureau → three bureau – With this parameter, SmartSelect will pull an applicant’s credit report from one bureau first. You can select which bureau you want this to be. If this initial credit report meets your credit thresholds, it will pull the second bureau report. If that one also meets your credit thresholds, it will upgrade to the three-bureau report.
        • One bureau → three bureau – If an applicant’s first bureau credit report passes your credit thresholds, SmartSelect can skip the second bureau step and automatically pull a three-bureau credit report.
        • Two bureau → three bureau – With this final parameter, SmartSelect pulls credit reports from two credit bureaus at once. If either one of these reports meets your credit thresholds, SmartSelect will upgrade to a three-bureau credit report.

Note: If your credit criteria or budget constraints change, you can alter these parameters at any time.

Benefits of Using SmartSelect

Here are some of the benefits you can expect when you start using SmartSelect:

        • More affordable credit assessments – By evaluating your mortgage applicants using one credit bureau first, you can avoid spending additional money on those who clearly won’t qualify.
        • Time savings – In addition to saving you money, SmartSelect can save you time by automatically upgrading your credit report orders as your unique thresholds are met.
        • Optimized profitability – Your attention is one of your most valuable assets. With SmartSelect, you can focus on the borrowers who are most likely to close.
        • Easy integration – SmartSelect can send credit report data directly to your loan origination system (LOS), making it easy to integrate with your existing workflows.

Cut Costs & Grow Business in 2023 With Certified Credit

In summary, tools like Cascade Prequal and SmartSelect can help you achieve cost savings by reducing your use of expensive tri-merge credit reports. Better yet, these tools can save you time and improve your lending decision accuracy by letting automation do the hard work.

If you want to learn about more money-saving tools, Certified Credit has plenty of options. As a leading mortgage lending solutions provider, we’re constantly developing new solutions to help our clients improve their bottom lines. Some of our other cost-saving solutions for mortgage lenders include:

    • Automated lead generation and borrower retention tools
    • Automated verification of income and employment
    • Automated undisclosed debt monitoring
    • Flood zone determinations
    • Fraud and risk support
    • Settlement services

Want to start saving money in your mortgage lending business? Schedule a credit consultation with the Certified Credit team today.

How Can You Qualify More Borrowers in Today’s Market? 

The secret lies in discovering effective strategies that not only increase your pool of qualified borrowers but also reduce origination costs. Check out our “Unlocking New Opportunities:
Your Guide to Qualifying More Borrowers in Today’s Mortgage Market” to learn how you can integrate innovative approaches to streamline the qualification process, empower borrowers with a deep understanding of their credit and financial standing, and enhance your qualification workflow for improved operational efficiency and cost savings.


[i] NCRA. November 22, 2022.

[ii] McKinsey & Company. Competing on customer experience in US mortgage.

[iii] National Mortgage News. Retention rates fade to record lows for mortgage servicers.