The mortgage industry is lobbying Congress hard to allow lenders to rely on credit reports from one or two of the Big 3 credit bureaus (Equifax, Experian, and TransUnion) instead of all three (a "tri-merge") as is currently required. It argues that this will reduce costs, which is likely true.
This was discussed at a hearing by a subcommittee of the House Committee on Financial Services on February 11.
What's the Problem With a Tri-Merge?
In recent years, credit bureaus have been hiking the costs of each credit report pulled. Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA), wrote to the director of the Federal Housing Finance Agency (FHFA) in December.
"Despite the introduction of new credit score models and updated offerings from both FICO and the credit bureaus, our members are facing another significant increase in credit reporting costs for 2026 of 40% to 50% on average," wrote Broeksmit. "This will be the fourth consecutive year of dramatic price increases for the GSE-required 'tri-merge' product, which has dramatically raised the costs that lenders and borrowers pay for credit reports." The GSEs are Fannie Mae and Freddie Mac.
Elsewhere in his letter, Broeksmit suggests that a single credit report is sufficient for those with credit scores of 700 or higher. He says that MBA members have scoured their records and found "narrow variances" in reports and scores for those with such high scores.
How Much Are We Talking About?
Total closing costs on a home purchase typically come in at between 2% and 6% of the mortgage's value. For instance, on a $300,000 loan, one might have to pay anywhere from $6,000 to $18,000.
Credit report fees are often counted in tens of dollars or sometimes hundreds. When CNBC wrote last weekend about higher credit check fees, it gave an example of costs rising to $47.05 in 2026 from $33.50 last year for an individual applicant.
Of course, every penny counts when one is purchasing a house or condo. But we doubt a $50 or even $100 charge will cause much hardship to the average home buyer.
Who Stands to Benefit From the Change?
So, why is the mortgage industry so concerned about this? After all, it passes on the charge to consumers when a loan is closed.
The issue is that not all loans are closed. And then a lender often has to swallow the cost itself.
This can add up for larger lenders. Indeed, last February, rejected applications for mortgage refinancing peaked at 42%, according to New York Federal Reserve data. However, by June that year, the rejection rate had dropped to 15%. In 2024, the average rate for mortgage (rather than refinance) applications being rejected was 20.7%, according to a different CNBC report.
Whatever the rejection rate, it's easy to see why mortgage lenders resent having to pay such rapidly growing sums to credit bureaus when applications fail. To them, it's dead money.
But the real question is: If Congress acts to protect them, will those lenders cut other costs charged to borrowers or just add the savings to their bottom lines?
Another Credit Report Reform
Meanwhile, the Federal Housing Finance Agency (FHFA) has moved to change another aspect of credit scoring for mortgage applications.
"For decades, mortgage loans delivered to Fannie Mae and Freddie Mac (the Enterprises) have required credit scores, when available, from a single model – the 'Classic FICO' model," says the FHFA on its website. "Now FHFA is directing the Enterprises to permit lenders to choose between two approved credit score models — Classic FICO and VantageScore 4.0 — for loans sold to the Enterprises."
This was done to conform with the Credit Score Competition Act of 2018 and can be seen as part of the government's drive to improve housing affordability. How much practical difference these reforms make to home buyers' costs is yet to be seen.
