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TransUnion's Trended Data to Support Fannie Mae Mortgage Initiative

National Mortgage Professional
Oct 19, 2015
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TransUnion has applauded Fannie Mae’s decision to utilize its CreditVision suite of solutions and enhanced information in the assessment of mortgage applicants. While details of Fannie Mae’s plan are still forthcoming, their use of trended credit data, starting in mid-2016, has the potential to benefit mortgage borrowers by providing Fannie Mae and mortgage lenders a more comprehensive view of a borrower’s historical credit performance.

“CreditVision is an innovation that has had a dramatic impact on how lenders utilize credit information within their lending strategies. The use of trended credit data by mortgage lenders has the potential to help millions of people access the opportunities that lead to a better quality of life,” said Jim Peck, TransUnion’s president and chief executive officer. “As a global leader in risk and information solutions, we recognize the importance and benefits of using information for good.”

A recent TransUnion analysis found that the use of trended data can potentially impact vast numbers of consumers in the housing market through better pricing and access to mortgage loans. TransUnion research indicates that the percentage of consumers in the Super Prime risk tier, who generally have the greatest access to new loans at the lowest pricing, would increase from 12% of the population to nearly 21%.

TransUnion began work on bringing trended credit data to market more than five years ago, and launched CreditVision in January 2013. Internationally, TransUnion has launched its trended credit data solution in Canada and Hong Kong and the capability is also being pursued in many additional markets across the globe. Hundreds of financial services and insurance companies have already adopted or are currently evaluating CreditVision solutions with many of them experiencing substantial performance lift in underwriting, acquisition and account management strategies. These improvements have allowed lenders to approve more consumers for credit while offering better loan terms based on the improved insights.

TransUnion’s CreditVision suite of solutions helps to enhance lending decisions by leveraging an expanded view of credit data that includes up to 30 months of historical payment amounts and credit performance, where available, on loan accounts. CreditVision risk scores include the addition of actual payment amounts and trended data on accounts, data that are new to the credit report and not included in any other traditional risk scores today.

This expanded view of credit data can reveal trends and behaviors, such as consumers making on-time payments, paying more than the minimum amount due on credit cards and installment loans, reducing total amounts borrowed or decreasing utilization over time. These trends cannot be seen on standard versions of the consumer credit report or by any of the traditional risk scores that use the more limited credit report. 

“The majority of lenders have been reporting actual payment amount to TransUnion on a consistent basis, and we’re pleased to see this trend,” said Peck. “Now innovative lenders are able to use this information as an additional insight and powerful component in their underwriting strategies. This means borrowers who do business with these lenders could realize improved access to credit. We commend Fannie Mae’s decision to incorporate these data elements within the mortgage lending process.”

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