Credit scoring has been around in some fashion for more than 20 years as lenders request these scores during the process of ordering a credit report. Once the credit report has been pulled and scores provided the lender then uploads an electronic mortgage application for a quick decision. Coming soon however is an expanded version of credit scoring that takes into consideration how consumers pay their loan balances, specifically revolving credit accounts. These changes will take effect next month.

Currently, credit scoring looks at when payments were made and if the payments are no more than 30 days past the due dates is considered good credit and credit scores will improve. This information is also transmitted through the automated underwriting system. This means someone who pays on or before the due date is judged in the same fashion as someone who pays 29 days past the due date. No attribute is currently set for someone who pays the minimum amount due and someone who pays off the balance completely each month. This is the biggest change and can mean the difference between someone getting a loan approval and someone who will not, even with the very same credit score. This will also reward consumers who pay off balances more than someone who carries a balance of approximately one-third of their credit lines, currently the ideal balance according to FICO.

A consumer who pays off a credit card balance every month will now be given favor, especially when compared to someone that only makes a minimum payment and carries a high balance compared to the credit line. Further, someone who borrows more than the credit line, even temporarily, will also be seen less favorably. These changes will be in Fannie Mae’s new Desktop Underwriter System and labeled as Version 10.0. Version 9.0 is the one currently in place for banks and mortgage companies. Consumers who do not carry a minimum balance and pay off the balances more often than not will soon be rewarded for their payment patterns.