Research Outline

Credit Reports Sold to Mortgage Companies

Goals

To determine how many credit reports are sold to mortgage companies each year for the purposes of estimating potential product sales.

Early Findings

Preliminary research indicates that the number of credit reports sold to mortgage companies is not available. However, by using the number of mortgage applications in 2017, an estimated number of reports can be triangulated.
  • Mortgage companies can obtain "special compiled credit reports that merge multiple reports into one, giving a more-complete picture" of an applicant's credit history.
  • A "tri-merge report" is a compilation of the individual credit reports from Equifax, Experian and TransUnion.
  • A "residential mortgage credit report" compiles information from at least two of the three credit reporting agencies and offers additional information that helps lenders assess an individual's credit risk. This type of report is obtained through a third-party.
  • All lenders require a hard credit pull before approving a loan.
  • According to the most recent data available from the Consumer Financial Protection Bureau, there were 6,018,000 applications for mortgages in 2017. There were also 4,938,000 refinance applications in 2017, which would also require a hard credit pull.
  • This would mean that there were a total of 10,956,000 (6,018,000 + 4,938,000) mortgage applications in 2017 that would have required a hard credit pull from a mortgage originator.
  • However, if each mortgage originator pulled a credit report from all three major credit reporting agencies, this would mean that there were 32,868,000 (10,956,000) hard credit pulls in 2017.
  • In addition, many lenders pull credit reports twice: once for the application and once right before closing. If they pull credit reports from all three reporting agencies, this would mean that as many as 65,736,000 (32,868,000 x 2) hard credit pulls were made by mortgage originators in 2017.
  • This is only a ballpark figure, though, because some streamlined refinance mortgages do not require a hard credit pull.