Trended Credit Data

Fannie Mae's inclusion of trended credit data in its underwriting platform will provide mortgage lenders with access to additional insightful data, helping you more accurately assess risk through more advanced analytics.

What does this mean for you as a lender?

Confident credit risk underwriting is contingent upon successfully predicting consumer behavior in the future. The ability to see how a consumer’s credit activity is evolving over time, or trended credit data, provides you insight into behaviors and patterns,  which can be used to help make stronger, more confident lending decisions.

What is trended credit data?

Trended credit data provides a sequence of up to 24 months of the borrower’s payment patterns, and offers a historical perspective of specific consumer payment behavior – including scheduled payments, actual payments and past balances.  This expanded, two-year, granular viewpoint of the consumer creates the opportunity to extract meaningful statistics to help predict future behavior.

Gain deeper customer insight

Using trended credit data will help mortgage lenders examine how consumers are managing their credit accounts over time.  Today, you can see consumers’ existing balances and determine whether they have paid their bills on time; however, you cannot tell if consumers are consistently carrying debt loads on revolving accounts, such as credit cards, or whether they pay their balances in full every month.

For example, a consumer with a large credit card balance who pays in full every month (a “transactor”) likely has a higher level of creditworthiness than a consumer with a large credit card balance who only makes the minimum required payment (a “revolver”).  Existing credit reports can’t always differentiate between these two types of consumers.

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Trended Credit Data Online Tutorial. Click Here to View

Resources

Equifax Trended Credit Data Infographic

Fannie Mae Trended Credit Data and Desktop Underwriter Infographic

Fannie Mae Trended Credit Data Commentary

Equifax Trended Data FAQs for Lenders

(Equifax eMortgage login required to download FAQs)

What this means for consumers

Based on an analysis* conducted by Fannie Mae, trended data in Desktop Underwriter’s credit risk assessment can provide more creditworthy borrowers access to mortgage credit. Giving weight to how borrowers pay off credit debt puts more power in their hands to control their credit evaluation. Borrowers can potentially improve their evaluation by the DU credit risk assessment each month by paying off credit card bills in full.

*Source: Fannie Mae, “Trended Credit Data Improves DU Risk Assessment and Supports Access to Credit” – March 2016