When it comes to giving out loans, a borrower’s credit information is very important to take into consideration. Most of the time, a lender orders this credit history from the 3 major credit bureaus: Equifax, TransUnion, and Experian. After obtaining information from all 3, they take the middle score to ensure that a borrower is neither overcharged nor undercharged for their loan.
However, some lenders have been taking the credit report from only 2 bureaus, which is called a bi-merge credit report. While this may seem like a small difference, it is estimated that 1 in every 3 borrowers has seen a credit score discrepancy of 10 points or higher because of this report type.
Moreover, by only taking 2 credit reports, lenders leave themselves open to missing extremely detrimental information from a borrower’s financial history. Ultimately, the only way to prevent lenders from loaning to risky loans and to ensure consumers are paying a fair price is relying on the standard tri-merge credit report.
infographic by: www.equifax.com
