Trended Credit Data Implementation is Drawing Near

You may recall Fannie Mae’s October 2015 announcement regarding their planned use of trended credit data beginning in 2016: Fannie Announcement on Trended Data. Although implementation information from Fannie Mae has been scarce since this initial announcement, Advantage Credit has recently received updates from the two national credit bureaus, Equifax and Transunion, who are participating in Fannie’s trended data initiative at this time. Please note that Experian is expected to start mandating trended credit data beginning in 2017.

With Fannie’s trended credit data policy as the backdrop, Equifax and Transunion have mandated all credit resellers operating within the mortgage industry to start delivering trended credit files to their mortgage lender clients. This includes mortgage tri-merge origination, prequalification, secondary use and credit reports for quality control. Equifax and Transunion both state that the trended data policy will extend to all credit reports accessed by mortgage lenders/brokers and there will be no carve-out for non-conforming loans. Advantage Credit client accounts will be converted to trended credit data beginning in March 2016 to ensure all of our customers are compliant with Fannie Mae’s new requirement. Equifax and Transunion are allowing a grace period for credit report price adjustments pertaining to the new, higher cost of trended credit files. You can expect new pricing for any credit report that includes Equifax and Transunion, or a combination of the two, starting with your July 2016 billing. Those price adjustments will be communicated soon in order to give our clients plenty of time to make necessary operational changes.

Trended credit data will benefit lenders by providing enriched consumer data and insight not available through traditional credit report data files. Benefits include:

  • Increasing home ownership and mortgage access among younger consumers, first-time home buyers and the 26 million potential borrowers defined as ‘credit invisibles’.
  • Scoring a higher percentage of consumers that were deemed un-scoreable by traditional risk scores.
  • Making the best lender terms available to a larger proportion of the population.
  • Identifying borrowers headed towards mortgage default earlier.
  • Identifying transactors vs. revolvers with up to 30 months of utilization history.

Advantage Credit is committed to a smooth transition for all of its clients. We will keep you updated, informed and educated on how our valued clients can best leverage trended data to enhance their value in the mortgage marketplace. Stay tuned for further communications, including a schedule of informational and training webinars.

In the meantime, check out more Trended Credit Data information on our website HERE and feel free to email us at should you have any questions.