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Impact of Trended Credit on Future Mortgages

The information and procedures used by mortgage companies to qualify home buyers continues to change. Trended credit is something new to be implemented for Desktop Underwriting (DU) data. Below is an overview of trended credit and the potential impact of trended credit on future mortgages.

What is Trended Credit

Your payment history contributes greatly to your credit score. So, if you miss one or more payments, it drops your score. It’s a pretty black and white analysis of payment history. Additionally, DU views buyers who miss payments as higher risk for defaulting on a home loan.

Trended credit evaluates your payment history more intelligently. If you miss a payment but then make significant payments on your debts, and/or even pay it off entirely, trended credit analysis gives your credit profile a more favorable view. Essentially, it interprets that those missed payments as not being reflective of your current/general ability to repay your debts. This reduces the perceived risk of you as a borrower.

Impact of Trended Credit on Future Mortgages

So, what does this mean for future home buyers? Although trended credit data will not impact credit scores, it will impact DU risk assessments. This can actually help home buyers. By regularly paying off revolving debt (i.e. paying credit card bills in full each month), buyers can demonstrate that they are less risky despite having missed payments in the past. The impact of trended credit on future mortgages will be positive for home buyers who make a diligent effort to pay their credit card bills each month.

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About Chris Graves

I grew up in Massachusetts, spent the majority of my young adult life in Boston, and own a home in Windham NH. I have owned properties in MA and NH. I specialize in mortgage lending in Massachusetts and New Hampshire and my company does have the ability to lend in other states. I graduated from the University of Massachusetts in Amherst Massachusetts in 2002. I have a Bachelor’s in Science. In addition to managing a team of loan officers my personal loan production is always in the top of the entire of company. I have personally been in the mortgage business for over 13 years. I pride myself with taking my clients from application to close in the smoothest and quickest way possible, while keeping them well informed during the entire process. I originate my own loans from start to finish and work hand in hand with my loan processors & underwriters to make sure I am updated to the minute with all of my files. I stay up to date with lending guidelines and speak with underwriters on a daily basis to ensure I am aware of all of the lending guidelines in place.

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