The Power of Three: Why Competition and Complete Data Are Key to the Future of Homeownership

Highlights: 

• Fierce competition among the three credit bureaus drives innovation, expanding the credit file with alternative data (like rental and utility payments). This enables lenders to make more informed, competitive pricing decisions and ultimately expands mortgage eligibility for a more inclusive lending future.

• To prepare for the FHFA's enablement of modern scores, lenders must immediately receive and evaluate VantageScore in mortgage transactions. Proactive evaluation of these scores, which leverage new data, is critical for developing a portfolio and underwriting strategy ahead of new guidelines.

The mortgage industry is at a pivotal inflection point, and the discussions at MBA Annual 2025 underscored a simple truth: while the three Nationwide Consumer Reporting Agencies are competitors, we each share the belief that we must champion innovation and leverage all available data to expand homeownership. 

Clayton Collins, CEO of Housing Wire, led a discussion between Michele Bodda, President of Experian Housing, Verification Solutions, and Employee Services at Experian, Satyan Merchant, SVP of Financial Services at TransUnion, and myself that centered around how we must champion innovation and leverage all available data to ensure a more inclusive lending future.

Our dialogue brought several critical topics to the forefront of the lending landscape. Here are some key takeaways from our discussion on the future of data and competition in mortgage:

1. Competition Fuels Financial Inclusion and Affordability

It may sound counterintuitive, but our fierce competition is the engine driving our commitment to an inclusive approach. All three bureaus are focused on the single objective of helping more people qualify for the loans they need. This dynamic encourages us to innovate and offer new value to our partners and, ultimately, the consumer.

A prime example is our collective effort to support greater access. Our agencies have each separately and independently made announcements about expanding VantageScore for mortgage lending, which directly benefits our partners and the borrower. By enabling lenders to make better, more informed pricing decisions based on a full credit picture, the consumer benefits by securing the best possible mortgage rate and avoiding detrimental last-minute rate changes closer to closing. The fundamental principle remains: more data is better for the consumer, enabling more people to access and qualify for credit.

2. The New Data Ecosystem: Beyond Traditional Credit

The credit file is more diverse now than ever before. In the past five to ten years, the number of contributors supplying data to the credit file has increased by three times. This expansion includes alternative data sources such as:

• Rental payment history

• Utility and telco information

• Specialty finance products, like Buy Now, Pay Later

These additions, which are leveraged by modern scores like VantageScore, are critical. They help improve the view of the customer, especially the marginal consumer, by providing a more complete picture of their financial responsibility to help them achieve mortgage eligibility.

3. The Essential Truth: Why No Two Credit Files Are Alike

Credit files are inherently different across the three nationwide consumer reporting agencies (Equifax, Experian, and TransUnion) for several reasons:

• We don't share files: Each Consumer Reporting Agency (CRA) must independently source and aggregate data, leading to unique reports.

• Furnisher Choice: There is no law requiring furnishers (lenders, creditors, etc.) to report to every bureau, and they often choose to report to a select number.

• The Rise of Alternative Data: The file is more diverse than ever. The number of data contributors has gone up 3x in recent years, including new financial products and alternative data sources.

4. An Inclusive Approach to Homeownership

The central objective shared by all three bureaus is simple: How do we help more people qualify for a loan?  For the marginal consumer or the first-time homebuyer, having more data—including things like rental payment history, utility payments, or short-term lending trade lines—can be the positive signal that makes them mortgage-eligible.

• Reducing data eliminates people: An inclusive approach means adding more data to create a score and trade lines where none existed before.

• Fair Representation: Our mission is financial inclusion—making sure we can fairly represent all consumers and give everyone the chance at homeownership.

There is a significant industry conversation about reducing the number of reports pulled (moving to bi-merge or single file) for supposed economic savings. Our position is clear: this is unlikely to achieve its purported purpose and this is a very slippery slope.

Lenders who operate in non-mortgage spaces (like auto or credit card) often voluntarily pull two or three credit files because the differences give them a competitive edge in making better decisions and pricing their products more aggressively.

5. Why More Data is Better for the Lender and the Borrower

• The Best Price: The proven safety and soundness of the current system ensure the consumer gets the best price possible. Losing a loan due to a surprise rate change at the last minute is far more detrimental than the small cost of comprehensive data upfront.

• Risk of Adaptation: The absence of data punishes the consumer from a pricing perspective. If the overall ecosystem has less data, pricing models will have to adapt to account for what they are not seeing, potentially leading to higher pricing across the board.

• Lender Choice Today: Lenders already have the choice to pull one report upfront, but many voluntarily pull all three early on to ensure they have the full picture, avoiding the bad borrower experience of changing the rate closer to closing.

In a system where the average mortgage is over $400,000, paying a small amount more for comprehensive credit data is vital to keeping the system safe, sound, and fair for all consumers.

6. Preparing for 2026: Adopt VantageScore and New Data Now

As the industry approaches a period of greater lender choice, particularly with the FHFA’s enablement of modern scores like VantageScore, lenders must prepare now.

The advice from each of the CRAs is unanimous: receive the VantageScore and evaluate it in your mortgage transactions. We have made modern scores like VantageScore available now so you can evaluate them in actual underwriting decisions. The GSEs will soon release their guidelines, but lenders need to develop their own "Rosetta Stone" now to understand how these scores—which incorporate the very alternative data we’ve been discussing—will impact their portfolio and underwriting decisions.

Want to hear the full exchange on how the industry is preparing for the future of mortgage lending? Listen to the full conversation here.                                                                                     

The podcast was recorded on October 20, 2025, at MBA Annual 2025 in Las Vegas, Nevada.