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  • Credit
  • Innovation
  • Players’ Strategy
  • United States

Credit Karma Enters Mortgage Lending Market

The American company Credit Karma acquires the mortgage-focused lending platform Approved, to modernise their consumer-facing digital offers and contribute to dematerialising associated processes for 80 million Credit Karma members. They deem that this buyout is a logical choice given their core business, i.e.: credit scoring.

Credit Karma enters the market for customer facing digital mortgages through acquiring Approved. This FinTech proposes a technological platform for banks and mortgage brokers. The goal is to modernise lending processes via automating tasks such as sending supporting documents when applying for a mortgage loan.

This would make the overall procedure less tedious and complex, and it would also ensure some transparency.

Customers may save both money and time, as well, which could contribute to securing their loyalty.

Comments – Making room for mortgages, too

With this buyout, Credit Karma –which used to focus only on consumer lending– expands its range of services while still upholding a consistent approach in terms of market positioning: especially, they can highlight their expertise in assessing credit scores. Their new mortgage business appears as a natural addition aiding this Unicorn’s development and market reach.

Also, most of Credit Karma’s users are Millennials. This segment became a priority inducing further diversification efforts (when they included a conversational agent, for instance). They try to secure their loyalty, and assist them throughout different life impacting projects (in this case, as they buy their first real estate property), standing out as an actual trusted third party partner. This endeavour explains why they need to add new services. Credit Karma already proposes mortgage brokering services, but this buyout is meant to speed up automation processes, make them more efficient, and better address their customers’ needs.