Big Changes Coming to Credit Reports Soon...Trending Data!

We've got big news regarding credit reports: Beginning May 15th, 2016, credit reports will contain Trended Credit Data, and starting on June 25th, 2016, Fannie Mae will start using that trended data. Trended data is a detailed record of a consumer’s credit history and includes the historical payment amount for each month, going back 30 months under Transunion’s CreditVision, or 24 months under Equifax Dimensions.

So what exactly does this mean for you when you’re applying for a loan? Read below to find out more:  

What is Trended Credit Data? 

Trended Credit Data provides a fuller picture of a consumer’s credit behavior, supplementing the traditional moment-in-time credit snapshot with a more dynamic 2-year picture of a consumer’s history of managing revolving accounts. With this additional historical data (such as payment and balance,) lenders may be able to see how consumers have managed their credit accounts over time, allowing them to better predict future behavior and assess risk. 

Basically, it's expanded information on a consumer's credit history at a trade line level on several monthly factors, including:

  • Amount Owed
  • Minimum Payment
  • Payment Made

What is the purpose of TCD?

The new trended credit data is meant to improve modeling of loan performance, empower creditworthy borrowers, and support prudent risk management. There are no specific additional requirements of the associates; however, it will assist the underwriter in gaining a deeper understanding of the consumer's behavior history, including:

  • Spending patterns
  • Credit utilization
  • Past balances
  • Payment history

For example:

Image courtesy of FannieMae

Image courtesy of FannieMae

What does a Trended Credit Data trade line look like?

While it will take some time to understand the impact of this new credit report requirement, Fannie Mae says that the overall percentage of loans that receive an Approve/Eligible recommendation is expected to remain relatively stable (time will tell!) -- but you can be sure that we will keep you updated on any significant changes!

If you have further questions about this or want to know what your own credit score is, contact John Schutze or give him a call at (512) 524-8310.

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