Mortgage Industry Push to Drop a Credit Check Could Raise Borrowing Costs, Critics Warn

A proposed change to how mortgage lenders verify borrowers’ credit could save homebuyers a small amount upfront but cost them far more over the life of a loan, according to an op-ed by Aiden Buzzetti, founder and president of the Bull Moose Project, published as sponsored content by Breitbart News.

At issue is the “tri-merge” credit report, a standard practice requiring mortgage lenders to pull credit data from all three major credit bureaus before approving a loan. Mortgage lenders are now pushing to replace that standard with a “bi-merge” system that relies on only two bureaus.

According to Bloomberg, cited in the op-ed, the Federal Housing Finance Agency (FHFA) is planning to direct Fannie Mae and Freddie Mac to make that switch. The change could be announced by FHFA Director Bill Pulte as soon as October 12, when he is scheduled to speak at the Mortgage Bankers Association’s annual conference.

Buzzetti argues the change amounts to a false economy. A traditional tri-merge report typically costs borrowers around $80 to $100, while switching to bi-merge would cut direct data costs by roughly one-third — a savings of about $30. But he argues that a less complete credit picture could lead lenders and investors to price in more risk, raising interest rates for borrowers.

Citing research from the American Enterprise Institute, the op-ed notes that even small rate increases compound significantly over a 30-year mortgage. On a $400,000 loan, a one-basis-point rate increase adds roughly $1,000 over the life of the loan, while a quarter-point increase can add more than $20,000.

Saving $30 and risking $5,000 is not affordability, Buzzetti writes, calling it a case of mortgage lenders profiting from homebuyers for decades through higher interest rates.

The op-ed argues the tri-merge system better protects borrowers because credit information can appear inconsistently across the three bureaus — one file may show an account, payment or error that another does not. Buzzetti says this matters most for first-time buyers, younger Americans, and borrowers with thinner credit histories, where a single missing record could affect whether someone qualifies for a loan or what rate they are offered.

A national survey of more than 1,200 voters conducted by McLaughlin & Associates, cited in the piece, found that two-thirds of respondents support requiring lenders to pull all three credit reports, including 71 percent of Republicans, 62 percent of Independents, and 59 percent of Democrats.

The same survey found that while 60 percent of voters are dissatisfied with housing affordability overall, only 10 percent identified closing costs as a significant hurdle, and just 3 percent cited the cost of a tri-merge report specifically as a concern — a point the op-ed uses to argue that affordability pressures voters actually worry about, such as home prices and mortgage rates, would not be addressed by dropping the tri-merge requirement.

The op-ed frames the proposed change as being at odds with President Trump’s stated focus on making homeownership more attainable, though it does not cite any statement from the administration on the FHFA proposal itself.