You Need to Know About Trended Credit Data and DU 10.0

Education & Training with Adhi Schools, LLC

As the lending industry evolves, changes are made to credit reporting. The newest of these changes is the emergence of a concept known as “trended credit data”. Equifax, one of the three major credit bureaus, has called it “the most important tool developed by the credit reporting agencies since the advent of the credit score” (CAMP source). Fannie Mae will be implementing trended data (TD) into its Desktop Underwriter risk assessment and automated loan underwriting software on September 24th, with the launch of DU 10.0.

Currently credit scores provide a picture of consumer behavior at a moment in time—a snapshot of sorts—and do not necessarily demonstrate how a borrower has managed credit over a period of time. The trended credit data provides information over time, attempting to more thoroughly tell the story behind a credit score. There are many questions and concerns with this new system, so we have tried to address many of them here.

How does trended credit data work?

Trended data will typically go back 24 months. Right now trended data just means data on the use, balance, and payment history of revolving credit cards. Other information will likely eventually be incorporated and examined over time, but for now it is essentially an examination of credit utilization and actual payment amounts on these accounts.

What exactly does this mean? With trended data, a viewer of a report will be able to view the way someone manages their credit card accounts in aggregate. Has their balance been slowly decreasing? Do they always pay off their card in full at the end of the month? Does the cardholder spend more seasonally (think summer vacations and holiday shopping)? What does their credit utilization rate (CUR) typically look like?

This information is very useful for two groups of hypothetical loan applicants. First, consider three applicants for a loan. They all have the same credit score—720. Just looking at that number, it would be difficult to determine any difference in risk in lending (if other traditional factors like down payment and income are appropriate for their application). But logically we know those people could have different levels of risk (debt, late or missed payments, etc.). Now let’s say trended data shows us that one of those applicants has an increasing aggregate balance across their cards, one has stayed roughly even and is making payments, and the other is demonstrably lowering aggregate credit card debt over time. Obviously the applicant with rising debt is more risky than the others. Along the same line of thought, the applicant lowering debt is likely the safest—they already have a good credit score, but are following debt management practices that suggest that in the future their score would be even better.

The other group of hypotheticals is the applicant that has good credit, a good application, but shows a high credit utilization rate. This means that their aggregate credit card debt is near their overall credit limit. This is a factor that can lower credit scores and is typically a red flag for approving an application (in the event the credit score is still in an acceptable range). Trended data can show how this debt has been accumulating and what the applicant’s debt management usually looks like. If the applicant is a seasonal credit utilizer that always pays off the debt the next month, then there is far less concern. In this case trended data may help someone get approved that normally would not have at that time.

DU 10.0 will allow underwriting for borrowers without credit scores. Currently this requires manual underwriting, and manual underwriting for these people will continue in some cases. To underwrite, a three-in-file merged credit report and evidence of at least 2 trade lines that stretch back at least 12 months will be required. One of these trade lines must be housing (rent payments), but the other can be anything, such as payments on a cell phone bill. There are more hoops to jump through as far as qualifications (proof of income, bank statements, loan-to-value ratio limits, etc.), but any applicant with no credit score should not expect a traditional process.

What does this mean for consumers trying to qualify for a mortgage?

Applicants with good scores but increasing aggregate balances across their cards are going to have more problems qualifying for loans than they did in the past. Upward trends in this debt indicate measurable, substantial increase in risk. According to the California Association of Mortgage Professionals (via TransUnion), these borrowers are 33-55% riskier (CAMP source) than similar borrowers who pay off their accounts in full every month.

People with decreasing aggregate balances on credit cards are going to fare better in the application process than in the past. These people are considered relatively lower risk and the process of trended credit will help these borrowers prove creditworthiness.

Under this system it is likely that rapid credit fixes (like paying off a credit card) will have an impact on score and likelihood of receiving a loan, albeit a smaller impact than before due to the fact that trended data will be able to determine overall riskiness of debt management, not just focusing on one or two good recent decisions.

While Fannie Mae is changing the way it looks at credit and underwriting, it does not actually anticipate a substantial change in the percentage of approvals. Through better risk assessment they anticipate more accurate approval, but this does not necessarily mean that the number of qualified applicants is lower. It just means that the number of those who would have been approved in the past, but will not now, is roughly equal to the number that would not have been approved in the past, but will now.

Who is NOT Affected by TD? 

Other popular sources will not yet be impacted by TD. Freddie Mac will not (yet) be using trended data. FHA and VA applications to DU will not be impacted yet by trended data either. It is quite possible that these programs will all be impacted by TD soon, but at least for now TD is just relevant to Fannie Mae products.

FICO credit scores and VantageScores will also not include trended data in their calculation.

There will also be the same vehicle for borrowers to dispute data as currently exists. Likewise, Adverse Actions and the required disclosures will also be the same.



  4. "Trended Credit Data and DU 10.0", a webinar presentation, California Association of Mortgage Professionals (CAMP)


What are your thoughts on trended credit data? Do you know anyone with concerns? I would be happy to answer any questions and if I cannot I'm sure someone else can! 


Posted by

Cody Carmen

Comments (6)

John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Cody Carmen This is very good report on trended credit data and DU 10.0.

Jul 08, 2016 10:54 AM
Cody Carmen

Thank you John Pusa. Now that the update is only a couple of months away I think more people will start writing and talking about the topic, which is great.  

Jul 11, 2016 01:25 AM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

That's interesting.  Looks like people who "repair" credit will now have to wait a bit longer after that score recovery to meet underwriting standards perhaps.

Jul 08, 2016 02:04 PM
Cody Carmen

Tammy Lankford, I think that is quite possible for a lot of people. It is definitely going to be important to show the ability to pay over time, so with other factors in line with lending standards it is likely that some fairly quick fixes are possible. But I think we will still learn a lot more in the first couple of months the program is rolled out. 

Jul 11, 2016 01:30 AM
Mary Yonkers
Alan Kells School of Real Estate/Howard Hanna Real Estate - Erie, PA
Erie/PA Real Estate Instructor

Thanks for this detailed report on trended credit data. Makes me think of old adage, 'He who has the gold makes the rules.'  Still true.

Jul 13, 2016 11:15 AM
Cody Carmen

Mary Yonkers wise words to remember. 

Jul 13, 2016 03:53 PM
Larry Johnston
Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC - Elkhart, IN
Broker,Friends & Neighbors Real Estate, Elkhart,IN

Hi Cody Carmen ,  Your blogs sure are packed iwth a lot of information.  Have a great week.

Jul 13, 2016 12:19 PM
Cody Carmen

Larry Johnston my last two topics have been rather dense, but I like the challenge and am happy to share what I learn!

Jul 13, 2016 03:53 PM
Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

This is a very comprehensive look at a new trend in lenders looking at credit history. I don't know why this post wasn't featured. You've laid out this information in a well written and easy to understand way. I didn't know about trended credit data until I read your post. Thanks for sharing this with all of  us. 

Jul 15, 2016 01:05 PM
Cody Carmen

Debbie Laity thank you for the kind words! I'm glad the topic was presented in a fairly easy to understand manner. It is a complicated subject that we all need to learn about sooner or later!

Jul 16, 2016 09:34 AM
Cody Carmen

Hopefully the topic keeps making the rounds on AR in some way between people's posts and questions. 

Jul 16, 2016 09:34 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Cody I bet you a lot of people have no idea about this,  neither do many Real Estate Agents, too bad this post did not get featured... more people would learn about this topic, Endre

Jul 19, 2016 04:20 PM
Cody Carmen

It didn't get a feature, but I think others will write about it. And there's always the chance someone feels the need to re-blog this one in the event that no one else writes on the topic. 

Jul 20, 2016 01:09 AM