Credit Costs Are Rising — Here’s How to Stay Efficient and Stay Ahead

As credit reporting costs increase across the mortgage industry, lenders are facing a new challenge: rising operational spend at the same time margins are tightening. The good news? You don’t have to accept shrinking profitability,  you can optimize.

In this post, we’ll explain what’s driving cost changes, how it affects your business, and where to focus your efforts to protect margins, streamline workflows, and make every credit pull work harder for you.

Why Credit Costs Are Going Up

Recent updates from FICO and the major credit bureaus have shifted how credit data is priced industry‑wide.

Key Drivers

• FICO Royalty Adjustments: FICO has implemented its first significant pricing model revision in years, altering score distribution fees.
• Credit Bureau Contract Changes: Bureaus are updating delivery terms in response—pushing costs higher for lenders and vendors alike.

These changes aren’t unique to any single credit partner,  they’re reshaping the economics of credit reporting everywhere.

What the Cost Shift Means for Your Pipeline

Even if your relationships with vendors remain strong, you’ll see more pressure on your cost per loan due simply to the new pricing landscape.

Here’s what that looks like in practice:

• Higher per‑pull costs
• Larger expenses tied to rescoring and hard inquiries
• Margin compression on thin‑profile or lower‑fee loan types

But rising costs don’t have to equal reduced profitability. Your response,  specifically how you order, automate, and monitor credit,  makes all the difference.

3 Practical Ways to Offset Rising Credit Spend

1. Order Smarter, Not More Often

Not every scenario needs the most expensive credit pull.

✔ Delay hard inquiries until later in the process
✔ Use soft pulls for early screening
✔ Set clear rules for when tri‑merge pulls are essential

These steps prevent redundant pulls and reduce unnecessary costs.

2. Automate Your Workflow

Manual ordering and disconnected processes waste time and money.

Automation can help by:

• Reducing manual entry errors
• Triggering only the right pulls at the right stage
• Limiting unnecessary rescoring

Automation doesn’t just save seconds,  it saves dollars.

3. Optimize Your Tech Stack

Bundling tools with thoughtful integrations simplifies operations and generates pricing leverage.

Consider:

• Working with partners that integrate into your LOS/CRM
• Consolidating vendors where possible
• Leveraging built‑in optimization tools

The efficiency gains ripple throughout your pipeline.

How Birchwood Helps You Stay Ahead

At Birchwood Credit Services, we combine market insight with implementation support to help lenders adapt, not just react.

What We Offer

• Workflow Optimization: Expert review of your credit ordering patterns
• Smart Ordering Logic: Implementation of rules that reduce waste
• Process Automation: Tools integrated directly into your LOS
• Transparent Pricing Guidance: Ongoing insight into cost drivers

Our focus is simple: help you reduce cost without sacrificing compliance or borrower experience.

Action Step: Let’s Build an Efficiency Roadmap Together

Rising credit costs are real, but with strategy and execution, they don’t have to cut into profit.

Schedule a 1:1 consultation with our team to evaluate your current process, identify cost leaks, and design a plan that enhances efficiency from application to close.