The Trended Credit Data Unintended Consequences

Trended Credit Data unintended consequences.

Fannie Mae has postponed(until further notice) the new automated underwriting system DU 10, including introducing Trended Credit Data.

Fannie Mae was expecting all three of the repositories to be ready with their trended credit data. Unfortunately, Experian® is not ready with their account history. Fannie initially considered moving forward using the old FICO®5 scoring model with Trended, but that is now on hold.

Trended credit data is an important improvement to the FICO® scoring model. FICO® scores were designed to predict the likelihood of repayment based on a consumers past payment behavior.

What consumer below do you think is more likely to pay their bills in the future?

• The consumer that keeps their balances low and pays more than the minimum amount over the course of two years?

• The consumer that keeps their balances maxed out during the same time period and makes the minimum payments. Then that consumer pays off their credit cards in the current month?