Equifax Updates Tri-Merge Credit Report With Trended Credit Data

Equifax Inc. is updating its tri-merge credit report with trended credit data – the most significant update for the report in more than 30 years.

The inclusion of this new data will help mortgage lenders target so-called “thin file” borrowers for mortgage loans. “Thin file” borrowers are typically self-employed or seasonal workers who are not traditional W-2 wage earners. Many of these borrowers have adequate income to handle a monthly mortgage payment but simply don’t have the required documentation to apply. Many of these borrowers have high FICO scores and are considered very creditworthy but no longer fit the “credit box” due to stricter regulations.

To help lenders go after these “underserved borrowers,” Equifax is now including up to two years of debt repayment and balance history in its tri-merge report.

The change, effective Sept. 24, follows the rollout of Fannie Mae’s Desktop Underwriter version 10.0, which includes support for trended credit data.

Recent research conducted by Fannie Mae shows that borrowers who paid off their credit card debt every month are 60% less likely to become delinquent than borrowers who make only the monthly minimum payment.

“For nearly three decades, mortgage lenders have used the same static formula to determine whether or not someone receives a home loan,” said Craig Crabtree, general manager of Equifax Mortgage Services. “Leveraging trended credit data to evaluate how borrowers actually manage and pay off their credit debt could have enormous potential in terms of opening up credit and providing many Americans with access to mortgage loans that they previously may not have qualified for.”


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