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New Changes Coming to Your Next Mortgage Application: Trended Data


New Changes Coming to Your Next Mortgage Application: Trended Data

Planning to apply for a mortgage in the near future? If so you should be aware of some major changes on the horizon in the mortgage world which might impact your next application. At the end of June, 2016 Fannie Mae will be adding a new element of credit data to be considered by their automated underwriting system, Desktop Underwriter (DU Version 10.0). The new element which DU will consider the next time you apply for a mortgage is known as "time series data" or "trended data."

What Is Trended Data?

According to Fannie Mae trended credit data is "expanded information on a borrower's credit history at a trade line (credit line) level [based] on several monthly factors, including: amount owed, minimum payment, and payment made." More simply phrased, trended data is a just a list of your account management information which allows lenders to see a chronological history of your credit card balances, payment amounts, and minimum payments over a series of time (2 years to be exact).  This historical payment data shows lenders whether you are a credit card balance transactor (someone who pays off her credit card balances monthly) or a credit card balance revolver (someone who does not pay off her credit card balances monthly and instead revolves a balance from month to month).

Why Does Your Mortgage Lender Care about Trended Data?

Credit reports and scores are products, sold by the credit bureaus and FICO (among others), which serve the purpose of helping future lenders predict the risk of doing business with you. If your credit reports and scores show lenders that you are a high risk borrower (aka you likely will not pay your bills on time) then future lenders may either turn you down when you apply for a loan or may charge you a higher interest rate to offset the risk they are taking.

Before trended data was featured on credit reports mortgage lenders (and any other lender for that matter) could not truly tell whether or not you made the habit of paying off your credit card balances in full each month or not. They could only see a snap shot of your current credit card balances.

Your historical payment data is important to lenders because it allows them to more accurately predict the risk of loaning you money. If your credit reports show that you pay off your credit card balances monthly then you are without question a lower risk borrower than someone who revolves credit card balances from month to month. Adding trended data to DU's risk assessment process allows mortgage lenders to more accurately predict risk.

Will Trended Data Impact Your Credit Scores?

At present trended data is only being considered by Fannie Mae's DU system when you apply for a mortgage. The data is used to help mortgage lenders using DU to predict risk, but it will not have any impact upon your actual credit scores at this time. Trended data is not considered in the calculation of your credit scores currently, but in all likelihood it is only a matter of time before trended data will have an impact upon your credit scores. Trended data is a powerful predictor of risk. You should expect to see it used more widely in the years to come.

Your New Pre-Mortgage Game Plan

In the past the best way to prepare your credit for a mortgage was to pay your bills on time, maintain credit reports which were free from derogatory information (i.e. collections, public records, etc.), and to pay off your credit card balances. However, since trended data shows lenders a 24 month window into your historical credit card payment habits, paying off your credit card balances 30-60 days before a new mortgage application simply is not going to cut it in the future.

(Need help preparing your credit for a mortgage? CLICK HERE to schedule a no-obligation credit analysis with a HOPE4USA Credit Expert today.)

As mentioned previously, mortgage giant Fannie Mae will begin considering trended data in the mortgage application process at the end of June, 2016. GSE Freddie Mac has also expressed an interest in eventually considering trended data as well. What this means for you is that with the consideration of trended data quite possibly thrown into the mix for your next mortgage application the truth is that the habit of revolving credit card balances from month to month could certainly cost you more money on your next loan and (in cases of borderline approval) could even potentially prevent you from being approved for a mortgage at all.

It has always been important to pay your credit card balances off monthly, both from a credit and a financial perspective. Yet it is now more important than ever to make and execute a plan to eliminate your credit card debt. That plan may include dipping into your savings, taking out a consolidation loan, or using the snowball method to wipe out your credit card debt as quickly as possible. Regardless of the exact method, it is important to stop feeling overwhelmed by your credit card debt and to start taking action. Remember, failing to plan really is as good as planning to fail. 


Michelle Black is an author and leading credit expert with over 13 years of experience, the credit blogger at, a recognized credit expert on talk shows and podcasts nationwide, and a regularly featured speaker at seminars up and down the East Coast. She is an expert on improving credit scores, budgeting, and identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here. 


Building a Credit Score from Scratch


Building a Credit Score from Scratch

There is no shortage of articles and ideas online clamoring to offer you tips and pointers about how to best manage your credit. You can even find videos, radio shows, and even television shows from many self-proclaimed "gurus" who are quick to share their credit secrets with you. Add to this flood of so-called professional credit advice the advice you may have received from your family, friends, and acquaintances and before long your head will be spinning with dozens of contradictory credit improvement strategies.

Unfortunately, the truth is that many self-proclaimed "professionals" and even your loved ones can give really bad advice when it comes to your credit. Most of this advice is likely given with a very well-meaning spirit; however, bad credit advice can hurt you even if the damage is unintentional. It is important to be careful whose advice you follow when it comes to your credit, especially when you are building credit for the very first time. Here are 3 tips to help you build great credit from scratch.

Tip #1: Do Not Assume Anything

If you are preparing to build credit for the first time you may genuinely believe that your credit reports are completely blank. However, assuming that this is the case without verification is a mistake. You should begin by checking all 3 of your credit reports.

You are entitled to a free copy of these reports every year from You can also access your 3 credit reports and 3 scores (if they exist) via credit monitoring services such as those found at You should develop the habit now of checking your credit reports often. It is ultimately your responsibility to monitor your credit reports to be sure that they remain accurate and error-free.

Credit Expert Advice: If you discover errors on your credit reports then you have the right to dispute those errors on your own or you can hire a reputable credit restoration company to assist you.

Tip #2: Establish Revolving Accounts

After you have checked your credit reports, if they are indeed completely blank, then you should consider opening a few credit card accounts - aka revolving accounts. Secured credit cards are a great place to start when you have zero established credit since these types of credit cards offer less strict qualification standards than most unsecured cards will offer. In other words, qualifying for a secured credit card is an easier process than qualifying for unsecured credit cards.

Credit Expert Advice: Just remember, it is absolutely essential that you keep all of your credit card payments on time every single month and you should never revolve a credit card balance from month to month either.

Tip #3: Establish an Installment Account

Credit scoring models such as FICO like to see that you know how to manage a variety of account types. Consumers who have a good mix of accounts showing up in their credit history can potentially be rewarded with higher credit scores. However, a problem which consumers with no established credit history face is the fact that it can be difficult to qualify for certain types of loans with little to no credit. Your solution? Enter the credit builder loan.

Many local credit unions will offer credit builder loans as a means for their customers to rebuild or build credit for the first time. Credit builder loans are generally issued for a low dollar amount ($500 - $1,000) and the funds are held in a savings account while you make the monthly payments to pay off the loan. Once the loan has been paid in full the funds are released to you, plus any interest earned, and if you managed your account properly then you will probably have around 6-12 months of on-time payment history showing up on your credit reports.

Credit Expert Advice: If you are thinking about applying for a credit builder loan product be sure to ask the credit union if they will report the account to all 3 credit bureaus.

Tip #4: Ask a Loved One for a Favor

The final way to establish credit from scratch which I will mention is to ask a loved one or a family member to add you as an authorized user to an existing credit card account. Though it is true that authorized user accounts will not show up on your credit reports 100% of the time, in the majority of cases when you are added as an authorized user to a credit card the account will show up on your 3 credit reports within a few months. Plus, if you are a parent then authorized user accounts represent a great way for you to help your children establish credit without dipping your toes into the very dangerous waters of co-signing.  

Credit Expert Advice: Before being added to any account as an authorized user you should be sure that the account has a flawless payment history and a low or $0 balance. Otherwise, being added as an authorized user could backfire and hurt instead of help your credit.

Michelle Black is an author and leading credit expert with over 13 years of experience, the credit blogger at, a recognized credit expert on talk shows and podcasts nationwide, and a regularly featured speaker at seminars up and down the East Coast. She is an expert on improving credit scores, budgeting, and identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here. 


Why Doing "Nothing" Can Do So Much Harm to Your Credit


Why Doing "Nothing" Can Do So Much Harm to Your Credit

Ignorance is bliss...or so the saying goes. However, when it comes to your credit reports and scores being ignorant can be a truly horrible strategy which can have some seriously negative consequences as well. People generally ignore their credit for one of two reasons. First, many consumers with good credit assume that everything on their credit reports is fine and do not even bother to check their reports until their next loan application. The second most common reason why consumers ignore their credit is due to the fact that it is so bad that they feel overwhelmed and powerless to change their credit situation. Regardless of the reason, ignoring your credit is a really bad idea.

Why Consumers with Good Credit Need Still Need to Pay Attention

If you always pay your bills on time and maintain very low or even $0 balances on your credit cards then odds are high that your credit scores are probably in pretty good shape. The truth is that you have the right to expect your credit reports to contain accurate information. However, the reality of how the credit scoring system works is that mistakes on credit reports happen. In fact the Federal Trade Commission released a study in 2013 which proposes that there were around 40 million mistakes on the credit reports of US consumers. Although the Fair Credit Reporting Act does give you the right to expect accurate credit reports, errors still occur every single day. What you may not realize is that the responsibility to make sure you credit reports remain error free lands squarely on your own 2 shoulders.

Credit reporting errors can range from insignificant with little to no credit score impact to all the way on the opposite side of the spectrum where the wrong credit reporting error can wreak utter havoc upon your credit scores. Thankfully, there are several options which make it extremely easy for you to keep a close eye on your credit reports in order to ensure that they remain accurate.

Option 1: In 2003, thanks to the FACTA amendment to the Fair Credit Reporting Act, consumers were given the right to access all three of their credit reports completely free of charge once every 12 months. To access these free credit reports you simply need to visit (Not-so-fun-fact: an average of only 4% of these available free reports are actually claimed by consumers annually.)

Option 2: If you are wise enough to understand the importance of keeping a close eye on your credit reports then you will also realize that checking your credit reports once a year is not going to be often enough. The good news is that there are many free options available to access and review your credit reports throughout the year - though this option can be a bit time consuming due to the fact that truly free reports can generally only be accessed one credit bureau at a time.

Option 3: Finally, there are also several affordable fee based credit monitoring services which will allow you to check an monitor all 3 of your credit reports and scores simultaneously and easily.

Why Consumers with Bad Credit Still Need to Pay Attention

There is no question that credit problems can feel overwhelming and insurmountable. When faced with credit problems the desire to stick your head in the sand and ignore them can be very tempting. Unfortunately, ignoring credit problems does not make them go away but only keeps you stuck in the same bad situation for longer than necessary.

Whether you choose to work on resolving credit issues yourself or to seek professional assistance with your credit problems you should make the decision to do something. No matter how bad your credit reports are currently - even if you are one day out of a freshly discharged bankruptcy - there are always steps which you can take to begin moving your credit back in the right direction.

CLICK HERE to schedule a no-obligation credit analysis with a HOPE4USA credit expert to learn how to improve your credit reports and what HOPE4USA can do to help.

CLICK HERE to download our free credit repair toolkit - no strings attached. 


About the author: Ron Lambright has been a credit expert for over 14 years and is the Executive Director of HOPE4USA - a company he helped to found after struggling to overcome personal credit issues on his own twice before. He is a regular guest on radio talk shows and is featured weekly as the premier credit expert at training seminars in the Charlotte, NC region and up and down the East Coast.  Ron is an expert on teaching consumers how to achieve  "loan ready" credit reports, improving credit scores, and an expert in the fields of business financing and business credit as well. You can connect with Ron on Facebook page by clicking here.