B3-5.2-01, Requirements for Credit Reports (08/02/2023)

The lender must obtain a credit report for each borrower on the loan application who has an individual credit record. The credit report must be based on data provided by the national credit repositories. Acceptable credit report formats are described in  B3-5.2-02, Types of Credit ReportsB3-5.2-02, Types of Credit Reports. For credit report requirements in DU see below.

A nontraditional mortgage credit report or other form of alternative credit verification may be used if the borrower

• does not have sufficient credit to enable the development of a credit score, or

• does not use the type of credit that is reported to credit repositories.

See Section B3-5.4, Nontraditional Credit History for additional information.

Credit reports must meet the following general requirements:

• The report must include both credit and public record information for each locality in which the borrower has resided during the most recent two-year period. If the lender relies on credit reports from foreign countries to document borrower credit histories, the credit report must meet the requirements and standards for domestic reports, and must be completed in English or include an English translation. (See B3-5.1-02, Determining the Credit Score for a Mortgage LoanB3-5.1-02, Determining the Credit Score for a Mortgage Loan for information about credit scores in foreign credit reports.)

• The report must include all discovered credit and legal information that is not considered obsolete under the Fair Credit Reporting Act. Although the Fair Credit Reporting Act currently specifies that credit information is not considered obsolete until after seven years, and bankruptcy information after ten years, Fannie Mae requires only a seven-year history to be reviewed for all credit and public record information.

• The report must be an original report, with no erasures, white-outs, or alterations. An automated credit report or one that is transmitted by fax is considered to be an “original” report.

• The report must include the full name, address, and telephone number of the credit reporting agency, as well as the names of the national repositories that the agency used to provide information for the report.

• The credit reporting agency must make responsive statements about all items on the credit report—indicating “unable to verify” or “employer refused to verify,” when appropriate.

The report must include all available public records information, identify the sources of the public records information, and disclose whether any judgments, foreclosures, tax liens, or bankruptcies were discovered (with these adverse items reported in accordance with the Fair Credit Reporting Act and to the extent reported by consumer reporting agencies participating in the National Consumer Assistance Plan).

Collected credit report information should not be changed. However, it is permissible to delete duplicate information, translate codes to plain language, and make appropriate adjustments to resolve conflicting information to ensure the clarity of the report.

The following types of changes are unacceptable:

• deleting tradelines that pertain to a borrower’s bankruptcy,

• adding a payment amount to a creditor’s tradeline when the creditor does not require a payment, or

• restricting information collection to a shorter time period than Fannie Mae requires.

Credit repositories should only change the information called to its attention by a creditor or a party that is not associated with either the real estate sale or purchase transaction or the mortgage financing.

For each debt listed, the report must provide:

• the creditor’s name,

• the date the account was opened,

• the amount of the highest credit,

• the current status of the account,

• the required payment amount,

• the unpaid balance, and

• a payment history.

The report must indicate the dates that accounts were last updated with the creditors. Each account with a balance must have been checked with the creditor within 90 days of the date of the credit report.

All data must be presented in a format that is easy to read and that is understandable without the need for code translations.

The report must list the historical status of each account. This status must be presented in a “number of times past due” format and include the dates of the delinquencies.

The preferred format is “0 x 30, 0 x 60, 0 x 90 days” late. The following formats are also acceptable:

• “Rl, R2, R3, …,” if it also gives historical negative ratings, such as “was R3 in 6/05.”

• a consecutive numbering sequence, such as “0001000 …,” provided the meaning is clear from the report.

Statements such as “current,” “satisfactory,” or “as agreed” are not satisfactory by themselves.

The report must generate an inquiry that will appear on future credit reports and must list all inquiries that were made in the previous 90 days.

If the credit report does not include a reference for each significant open debt on the application, the lender must obtain a separate written verification for each unreported debt. The lender also needs to verify separately accounts listed as “will rate by mail only” or “need written authorization.”

The borrower’s credit management skills can be assessed by analyzing repayment patterns, credit utilization, and level of experience in using credit.

Lenders are required to request a three in-file merged credit report from one of the credit information providers listed on Fannie Mae's website. The credit report used by DU in the final loan casefile submission must be maintained in the mortgage loan file. A DU observation message will identify all of the credit reports evaluated by DU during the loan submission. The version of the credit report received by DU must meet the requirements in this topic and be one that supports trended credit data. Trended credit data is expanded information on a borrower’s credit history at a tradeline level on several monthly factors, including: amount owed, minimum payment, and payment made.

Note: To obtain a credit report that is compatible with DU loan casefile requirements, the borrower's present address must be within the U.S. or U.S. territories, with the exception of an Army Post Office (APO), Fleet Post Office (FPO), or Diplomatic Post Office (DPO) military address. Borrowers with foreign credit reports must be manually underwritten.

See  B3-5.1-01, General Requirements for Credit ScoresB3-5.1-01, General Requirements for Credit Scores, for additional information about credit report requirements related to credit scores.