The biggest change in credit reporting in 25 years is now upon us, and implemented in underwriting engines as of 9/24/16. It’s called “Trended Credit Data”. Trended Credit Data allows lenders to see your payment behavior over the past 24 months, in order to give them a more comprehensive understanding of your financial profile. This new format captures your spending habits, and your credit risk in lending on a home loan will be partially determined from this standpoint.

Trended Credit Data reviews your payment history (amounts) and balance figures on your credit cards over the past 24 months. It determines if you are a:

  • “transactor” that pays your credit cards in full each month (low risk), or
  • “revolver” who carries a balance, and that balance either stays steady or increases (higher risk)

This is a very different format from the past couple of decades, where a credit report was simply a snapshot in time of what your most recent month’s credit card balance and limit was. This new version takes a much more granular view of your behavior, and is something you should be aware of for purposes of seeking a home loan.

It is important to note that Trended Data will not affect your credit score, but the underwriting engines that lenders use (Fannie Mae and Freddie Mac), will take into account this history and make a decision on lending to you based on it.