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09-27-2016, 11:05 AM #1
Mortgage lenders now looking at historical payment data
I was just reading how Fannie Mae is moving mortgage lenders to look at more historical payment data as part of their underwriting.
It turns out research shows that paying your credit card balance in full every month is a strong indicator of credit-worthiness. Especially compared to consumers who usually just pay the minimum balance.
Apparently, there are a lot of consumers out there who avoid debt. They have great payment histories, but score low for credit availability and utilization. To make sure these thin-files that otherwise should score well are not left behind, mortgage lenders are now taking a deeper look.
I think this is a great idea and a huge positive change.
09-28-2016, 10:56 AM #2
Wish this had been around when we were buying. At the time, we had no student loans, no car loans, one credit card that we paid in full every month - and with a low limit to boot.
We were anathema to lenders. Not even sure to this day how we got approved.
09-28-2016, 12:16 PM #3
Yes - more of this. Let's not encourage people to go into debt so they can get credit when they need it for something real. Like a house.
09-29-2016, 12:42 PM #4
I wonder if we'll see more action against other banks. I bet that Wells isn't the only one engaging in this sort of behavior.
10-05-2016, 09:05 AM #5
I'd love for more lenders to look at how you pay your bills, and not just how much credit you can handle.
The current system just encourages spending and debt. Lets encourage hard work and thriftiness instead.