When applying for a credit card or auto loan, for example, your lender may request a copy of your credit report from only one of the nation’s three credit reporting agencies. Based on that one credit report, your lender will either approve or decline your loan request.
When you apply for a mortgage, your lender will request what’s called a Residential Mortgage Credit Report, or RMCR for short. This report, also called a “tri-merge” or “merged” credit report, contains information from all three credit reporting agencies – Experian, Equifax and TransUnion.
Why do mortgage companies want to see what’s on file with all three agencies? While the information each credit bureau has on file about you shouldn’t be radically different, there often are some variations. Reviewing information from all three bureaus is an extra step in the review process that reflects the amount of money that’s at stake with a typical mortgage. The RMCR also provides a way to meet guidelines set up by Fannie Mae and Freddie Mac, which purchase loans made by lenders.
Because mortgage companies use information from all three credit agencies, it’s always a good idea to request a copy of your credit report from Experian, Equifax and TransUnion before you apply for a home loan. Ideally, you should do this several months beforehand so you have time to address any errors you discover in any of the reports. You can order a copy of your credit report from each bureau without charge once a year.