Trended Credit Data Review
Is Trended Credit Data Good or Bad for the Lending Industry?
There has been a lot of talk of trend credit data.
Fannie Mae is making more announcements on how they’re going to handle trended credit data. All 3 repositories TransUnion, Experian and Equifax have now introduced Trended credit data.
Fannie Mae is fully integrating the new trended credit data into their underwriting decision model but they are still using the old FICO 05 scoring model. This could create a bunch of unattended consequences that I will be at covering in a future video. For now, I will give you three ways to beat trended credit data. When you talk about trended credit data consumers have to think about what is included in that data set. Trended credit data adds:
What was your scheduled payment?
What payment was actually made?
What was your current outstanding balance?
What was your high balance on the account?
Trended Credit Data is going to look at those four factors that revolve around credit utilization. As I have said before 5 to 9% is where borrowers should aim for to keep their utilization to score to get the most points available from your credit card from a credit scoring perspective.
What are three ways that people can actually beat trended credit data?
1. It doesn’t cost you anything to increase your credit limit so I would call my creditors as long as they don’t pull a new hard credit inquiry, ask for an increase the limit as high as they will allow, because trended credit data doesn’t care about how high your credit limit is it just cares about how much you use. As long as you have the self-discipline to keep your balances low you’ll be fine.
2. Installment loans will also have trended credit data. How can you improve your Trended credit data score based on installment loans? Installment loans by definition are a fixed amount every month. What consumers could do is pay $1 more for their payment and that can go toward principal. Hopefully, you have the installment loans paying automatically just set them up to pay one extra dollar every month. That way when trended credit data is considered you’re going to actually be better off.
3. The most important is going to be pay before the reporting date! I talked about this before and it becomes critical that consumers find out when their reporting date is and make sure they keep their balance low (five to nine percent if you can) as low as possible before the reporting date the reporting date has never been more important.
Consumers really need to take control of their finances and find out when their creditors report the information to the repositories.
How can you find out your reporting date?
1) Call the creditor and ask when do you report to the repositories?
2) Consumers can also check what the creditor tells the by going online every day and looking up your current charges on your credit card and when the current charges are no longer there. The day before that is a reporting date when all the current charges all gone and in the previous statement. then that previous day was the reporting date. Then consumers will know in the proceeding months that the reporting date will be about the same date in the future.