You’ve probably heard of the three consumer credit reporting companies: Equifax, TransUnion, and Experian.
These companies tell credit lenders if you’re a reliable consumer that manages credit lines well.
If you’ve got a bad credit score…
Then it’s probably hard for you to open new lines of credit.
And it’s almost impossible to get approval for a mortgage.
Well, what if you’re closer to buying a home than you think?

The Federal National Mortgage Association (Fannie Mae) provides services for Americans of all incomes to afford housing.
Fannie Mae recently announced that credit lenders must begin using trended data by mid-2016.
Well here we are in mid-2016 now…
And do you know what trended credit data is?
The short answer is…
It’s starting to take over as the new credit score for consumers.
But how?
It feels like it came out of nowhere, right?
Here’s a brief overview of trended data:

What It Is
Trended data is more in-depth information of a borrower’s credit history at a credit line level on several monthly factors.
For Fannie Mae, it’s a new way to view mortgage applicant’s credit and payment history.
These factors include:

• Amount owed
• Minimum payment
• Payment made

The payment amount you make each month is going to impact your credit history more than it did before.
Someone that pays off their entire balance will be a lower risk than someone that only makes the minimum payment.
And someone that pays off more than the minimum payment will be a lower risk as well.

The Benefits
Trended data improves the accuracy of a credit risk assessment.
But the big benefit is that people that cannot get approved for a mortgage because of a low credit score might pass for a mortgage with trended data.
This is a more comprehensive view of consumer’s historical credit performance.
The lenders are going to see:

• Spending patterns
• Credit utilization
• Past balances
• Payment history
• Property and employment records

So borrowers that always pay off their balances will benefit the most from trended data.
They are going to be the low risk borrowers.
Borrowers with delinquencies usually have to wait years for the marks to come off their credit score.
But with trended data, the new credit analysis can benefit the borrowers that quickly pay off their revolving debt.
Consumers with a low credit score might be able to buy a home if their trended credit data passes as a prime risk.

Credit Vision
Transunion was the first major credit reporting agency to bring trended data to the market.
Transunion completed a survey that showed millions of consumers how they can benefit from trended data scores.
Consumers qualified in three different tiers:

• Non-prime
• Prime
• Super Prime

Within the new tiers:

23 million more people pass as super prime, or low risk, borrowers.

26 million people with previous unscorable risk factors would become favorable borrowers as well.

And almost three million of those people would pass as super prime risk borrowers.
That’s more than 10% of people that was previously denied!
Consumers with super prime credit scores can literally save tens of thousands of dollars over prime credit scores.
And prime credit scores can save nearly double the cost of non-prime credit scores.
Trended credit data can help millions of Americans find ways to get mortgage and credit approval.

But Remember:
Keep track of all your payments and try to pay off more than the minimum payment each month.
This will help you keep a higher trended credit data score.
Never carry too much debt in between payment cycles!
Don’t fall behind on this score too.
It can help you own a home someday!

If you’d like to speak with someone about your credit, and how it may be impacting you financially, reach out to one of our credit consultants here.
We’re located in Tampa, Fl and have helped over 25,000 people nationwide restore their credit.