Trended Credit – What does it mean for you?

Trended Credit started in June 2016.

What does this mean for Consumers? Road to Good Credit

The Trended Credit Report gives lenders more of a historical view of payment history for the past 30 months.

This will show a bigger, more complete picture of a consumer’s credit behavior or an extended period of time.

It will give lenders the ability to see how consumers manage their credit over a longer period of time. The added focus will be what your balance for a particular trade line averages compared to your monthly payment and how much you actually paid each month.

If you pay your balances off each month your credit will show you are more creditworthy.

If you charge large amounts but pay the balance off each month a lender will consider you more credit worthy than the person that maintains a high balance and only makes the minimum payment each month.

Good News for Consumers

Stuff happens and Lenders understand life throws curve balls. The Trended Credit Report may help a Lender visually see how you normally handle credit but something happened and you made adjustments and are now back on track. This is good especially for home loans where underwriters tend to allow for a letter of explanation.

Of course for some Lender’s they may not consider hearing an explanation to determine their desire to extend credit. The Good news is though your payment history on the Trended Credit Report can reflect you have overcome an issue and are now back on course.

What can you do to ensure your Credit Scores continue to increase? Do you know your score

Best practice to increase your credit score is to use your credit account but always pay over the minimum payment required even if only by a few dollars while focusing on paying it down and keep the balance less than 30% of the total credit limit. This will show you know how to use the credit extended without over extended yourself.

Close out accounts you no longer need.

In the past we suggested that you keep old accounts open however with the new Trended Credit it is advised to close the credit accounts that you no longer leave with the exception of keeping the oldest accounts open so you can show longer payment history. Your Credit score is approved

How can we help you achieve your goals?

Leave a comment and let me know if you have any questions! Be responsible with the credit extended. It will pay off in the end!

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2 Responses to “Trended Credit – What does it mean for you?”

  1. askcarolynwarren Says:

    People need to be cautious about closing extra credit accounts. For a good conventional mortgage, lenders want to see three accounts. For FHA, two. That is the minimum.

    • Donna Jefferson Says:

      You are correct Carolyn. When I was in the mortgage industry we always told people not to close accounts before or during the loan process! Closing credit accounts can cause the credit score to dip, not to mention the loss of a trade line on their credit report. Especially if it is a long standing trade line with good payment history.
      Thank you so much for your comment!

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