Applying for a mortgage is a little different from applying for any other type of loan. Because of the size of the loan, you’ll undergo a much more thorough underwriting process for a mortgage than you would for an auto loan, a student loan, or most personal loans.
One thing your lender will do is examine your tri-merge credit report.
What is a tri-merge credit report?
A tri-merge credit report is:
- Also called a 3-bureau credit report or a residential mortgage credit report (RMCR)
- A single report that merges the data in your credit reports from each of the three major consumer credit reporting agencies (Equifax, Experian and TransUnion)
- Unique to the mortgage industry
When you apply for a credit card, the card issuer will pull one of your credit reports, but is very unlikely to examine more than one. There are probably exceptions, of course. Plus, credit card issuers generally have relationships with all three credit bureaus and there’s no way to know ahead of time which credit report will be pulled when you apply.
A mortgage lender, on the other hand, will purchase a special credit report that includes all of the credit data available on you from all three credit bureaus. If you apply with another person, like a spouse, the lender will purchase that same special credit report on him or her as well.
Is there a tri-merge credit score?
Credit scores are not merged. When a mortgage lender pulls your tri-merge credit report, it will include your FICO® score as calculated by each credit reporting agency.
What credit score does a mortgage lender use? Most lenders use the middle score (or the lower middle score if you jointly apply).
Also, remember that the credit score a mortgage lender sees can be quite different from the free or purchased credit score you get online. A consumer credit score may give you a good idea of where your credit stands, but a mortgage credit score is tailored to mortgage risk factors.
Why do mortgage lenders get a special credit report?
Most U.S. consumers have credit files with each of the major credit reporting agencies (and credit files with other lesser known credit reporting agencies, too). The reports do not match exactly, however. Reporting to credit bureaus is voluntary. Creditors are not obligated to do it. Furthermore, they don’t have to report to all three bureaus. The data in your file can vary from one report to the next.
Mortgage lenders have a special interest in examining all of your credit data in order to make the best possible decision when it comes to offering what probably amounts to the biggest loan you’ve ever taken. They need to assess your creditworthiness as accurately as possible, partly to protect their own interests and partly to be sure the loan complies with the many laws and regulations that govern mortgages.
The tri-merge credit report allows mortgage lenders to see a complete picture of how you have used credit in the past.
Where does a tri-merge credit report come from?
The major credit bureaus sell tri-merge credit reports, and so does a whole industry of other providers called mortgage reporting companies. Whatever the source, the report combines the data found in the three one-bureau credit reports to eliminate duplicate entries. The combined credit report is much easier to read and evaluate than three separate reports.
Where can you get a tri-merge credit report?
You may have a hard time getting your hands on a copy of your tri-merge credit report. Generally, mortgage credit reporting companies only sell them to lenders.
If you have applied for a mortgage, you can ask the loan officer to provide you with a copy of your report. If that person cannot provide it, the company that prepared it for the lender may be able to. There is no law, however, that entitles you to a copy, for free or otherwise, unless your application is denied.
Any time your application for credit is denied, you are entitled by law to a copy of the credit report the denial was based on. This copy may not include your FICO® scores.
If you are able to get a copy of your tri-merge credit report, it should include your FICO® score from each bureau.
How can you find out what’s in your tri-merge credit report?
A tri-merge credit report doesn’t have any information that doesn’t already appear on your credit reports from Equifax, Experian and TransUnion.
The law says you can request a free annual credit report from each of major credit reporting agency, and they must provide it to you so long as they can verify your identity. Do this by visiting AnnualCreditReport.com, which is the only official website authorized to provide you with those free copies. You don’t have to request them all at once. You can stagger them throughout the year if you prefer.
If you want to apply for a mortgage in the future, you don’t need to see a tri-merge credit report in order to know what’s in it.
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