Equifax has announced that it is changing what information it supplies to mortgage lenders when they check the credit of an applicant. Equifax previously provided the applicant's credit availability, their credit use, and their total balance. Now, the credit reporting company will also give lenders access to the applicant's balance history and debt repayment activity for the past two years.
The change came into effect on September 24, and the goal is to provide lenders with more information about an individual's income, debts, and how they use and repay loans. The limited information provided before often did not give lenders enough information to determine whether applicants paid their debts on time or whether they had missed payments.
The new information will allow lenders to see patterns in how individuals use their credit. The changes came at the same time as a study by Fannie Mae, which showed that most borrowers who paid off their credit card payments completely each month were more likely to remain current on their other loans. According to the study, those who paid the minimum amount due on their credit card were more likely to fall behind on payments.
This is the first update to the information Equifax provides lenders in thirty years. The company hopes that by providing lenders with more information, applicants who may not have been eligible for a loan based on the limited information provided before may now qualify.
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