Credit bureau TransUnion is pushing back against the idea of replacing the current tri-merge mortgage credit model with a single credit pull, arguing that the shift would increase systemic risk and restrict access to credit.
The conclusion comes from a TransUnion study released during the Mortgage Bankers Association (MBA)’s Annual Convention and Expo, as the trade group has expressed interest in testing the concept. In June, MBA president and CEO Bob Broeksmit said the association was assessing the feasibility of using a single credit report for mortgage underwriting.
Proponents of the idea argue that a single report could simplify the process and reduce costs for consumers. They say there are alternative ways to fill potential data gaps — such as using consumer-permissioned data from bank accounts — without requiring all three reports.
TransUnion’s analysis warns of unintended consequences.
“A ‘single-pull’ environment creates significant risk that strong borrowers will lose access to credit while additional at-risk borrowers find themselves in a mortgage they can’t afford,” said Satyan Merchant, senior vice president of mortgage and automotive at TransUnion.
“In the long run, that creates fresh risks for investors and threatens the safety and soundness of a mortgage market with tremendous taxpayer exposure.”
According to the study, 4.4 million currently creditworthy consumers would become ineligible for a mortgage under a single-pull model due to credit report variance.. A 2023 TransUnion study found 2 million borrowers could lose eligibility under a bi-merge system.
Meanwhile, about 300,000 consumers who are currently ineligible would qualify for a mortgage, potentially leading to higher default rates if those borrowers can’t sustain their payments.
Borrowers who would receive a lower credit score under a single pull than the tri-merge average would collectively pay an estimated $6.5 billion in additional interest, TransUnion said. The study also found that 31% of consumers saw at least a 10-point change in their credit score — a shift especially consequential for those near the 620 threshold required for conventional loans eligible for purchase by Fannie Mae and Freddie Mac.
TransUnion argues that adopting a single-pull system could increase overall risk in the mortgage market, prompting mortgage insurers to raise premiums and potentially creating opportunities for borrowers to “game the system” by selecting their most favorable report.
Amid those concerns, Broeksmit said in June that early discussions with lenders and servicers “strongly suggested” that a single credit report could be feasible without adding undue risk to Fannie or Freddie.
“While a tri-merge is required for GSE loans, the GSEs do not use credit scores to make credit underwriting decisions, and there appears to be limited additive value in the data contained in multiple reports,” Broeksmit said.
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