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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.