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Market Pulse is a monthly podcast by Equifax, in partnership with Moody’s Analytics. Equifax hosts bring you interviews with industry experts on the latest economic and credit insights that can help drive better business decisions. Whether you’re in financial, mortgage, auto or another service industry, we help make sense of the latest economic conditions that impact you. This podcast series supplements our Market Pulse webinars, which occur on the first Thursday of each month.
Welcome to a special edition
of Market Pulse from Equifax,
where we break down what's shaping the
mortgage industry today and what happens
next.
Hi, I am Clayton Collins,
CEO at HousingWire,
and we are here MBA Annual
2025 for a pretty legendary
conversation. Mm-Hmm .
This may be the first time,
at least my first time,
bringing together leaders from the three
nationwide consumer reporting agencies
to talk about what's changing in data
in the mortgage process. Joel, Michelle,
Satyan, thank you so much for
joining us today. So, Joel,
I want to kick off with you
with your view on why data
is so important in today's
mortgage ecosystem and and
how you're thinking about
the landscape that is just the talk of
the town here at NBA Annual in 2025.
Well,
first I want to say very much thank you
so much Satyan and Michelle for joining
us. I think it's important for everybody
to know we are vicious competitors.
, I mean, outside
of this time right here,
we're gonna fight to earn our
business with each and every customer.
And we all come to the table with
our unique offerings and our unique
differentiators. So that's, that's the
first thing I want people to realize.
But more important, all of us are here
today because we actually stand united,
that more data is, is
better for the consumer.
And that starts with all
three credit reports. Yep.
And then that expands out
on all the differentiated
things that all three of our
organizations are doing to bring to the
industry with the single objective of
how do we help more people qualify for
the loan? That's what it's really about,
where there's so much conversation
about how do we reduce data?
That's how you eliminate people.
We're looking at an inclusive approach
of how do we get more people qualified
today. So I think we all share that.
And the fact that we're all sitting
here together is representative of that
united goal.
Michelle, do you feel the
same way? Vicious competitors?
Well, yeah, I can agree more
, I mean all day, every day.
And I totally agree. Also, our mission
is financial inclusion for all.
And so we spend all day, every day
not just competing with these guys,
but also working really hard to make
sure that we can fairly represent all
consumers and give everybody the chance
to home ownership if that's what they
want.
Alright. Sati, on the topic
of vicious competition,
it's been disclosed by each of you that
there are major differences between
your, your credit files
and the data you report.
Can you jump in and give us a view on the,
the differences that you see
between the data and, you know,
start with your organization
TransUnion? Sure.
Yeah. Thanks. you know, I think one,
one important fact when it comes to the,
the three national bureaus is we,
we don't see each other's file,
which make that, which makes that an
even harder competitive landscape, right?
I cannot inspect Michelle's
file or Joel's file.
So I really have to work with my teams to,
to do what we think is the best thing
to add to our, our our bureau data. And,
and it's something that, you know,
for those that aren't aware, we have,
you know, I, I, I can
speak to myself, you know,
me and my team are the face
of the mortgage business
and also the auto business,
but we have large amounts of
people whose job in is every day,
day in and day out to guide source more
information, more data on the file.
And one thing I want to add here is
the file is just becoming
more and more diverse.
Like we can talk about this a little
bit more, but there are so many new,
different unique financial
lending products that I
think the world right now is
as, as differentiated as
a file as we've ever seen.
What's an example of like these, the,
the new data capabilities
or features of the file?
Sure. So for one example would be the
buy now pay later lending product.
Okay. So the affirms of the world,
we work through CDI and and industry
organizations to, to talk about how,
how to get something
standard on that on the file.
But at the same time it's really up
to the furnishers to decide when,
how much and to whom they
furnish. And so again,
we compete very ferociously about getting
those difference getting as much data
as we can on our reports.
Yeah, Michelle?
Yeah, no, absolutely.
The goal is to give as much
representation to consumers as we can.
And so whether that's through
rental payment history,
whether it's through how
consumers manage their cash flow,
whether it's through
alternative financial services,
whether they be short term loans
or things like buy now, pay later,
like Satya was just talking
about. It's, I agree.
Like the files are more diverse now
probably than they've ever been.
I I think about it from overall
contributors. If you think about five,
10 years ago,
the number of people contributing data
to a credit file today has gone up three
x. Yeah. And it's all of the things that,
that my peers here are talking about.
It's different type of
contributors. And so you have the,
not only the difference
in financial contributors,
but then you also have the additional
data around are they paying rent,
like Michelle said,
or do they have utility information that
we can add because the new scores will
take that into account and help
improve that look of the customer.
These may be differentiators that,
that you understand and that
mortgage lenders may understand,
but consumers likely not.
They consumers probably have a very
little or or no recognition of what the
difference between Experian,
Equifax, and TransUnion is.
And that probably goes for a
lot of loan originators and,
and real estate agents and other
people who advise consumers.
How do we take a step forward in consumer
education for them to understand why
three consumer reporting
agencies exist and,
and how they aid in in credit. Joel,
if you want to kick us off there, well.
Sure. It, it all comes down to
education. And I think if, you know,
one of the things you hear about in the
mortgage industry today is the shopping
behavior Yep. And how
conversions have dropped.
Part of that is because of a lot more
applications for folks that are just
looking to see whether they app they can
apply or qualify and or if they could
save a few bucks on a refi, part of that
could be addressed through education.
The other part is that getting those
people that get denied the first time
enough education on how to improve their
score and their trade lines and those
type of things to be able to qualify.
And it all comes down to the data.
You know, without the data, you don't
have a score and without a score,
you don't go anywhere in the process.
We talked a little bit yesterday on one
of our sessions about one of my children
that, you know, would
love to buy a house and,
and now his dad needs to help him get
better about having credit history so he
can do, so.
If your, if your children need
education, then what, what the rest of.
Us to get, my goal is by
the end of this session,
we're gonna get him alone
. But anyway,
it's that education to help him
understand what he needed to do Yeah.
To get those additional trade
lunch so that he had a score.
So he would be considered.
Yeah. You know, I'd jump in and say
yeah, I can speak for TransUnion.
I think this exists with
all the bureaus is, is it's,
it's Michelle's comment earlier.
It's about getting access to
credit access to homes. You know,
TransUnion works a lot on, on that.
Consumer education, free credit scores,
download our app, right? To be able to,
to really understand what a consumer can
do to change and what changes they can
make to to make themselves
mortgage eligible. Right.
And so there's a lot of education there
that consumers do need to continue to
build on. And again,
with this proliferation
of different products,
you think about a younger generation
and maybe their first experience with
credit is, you know, an a firm loan,
right? To understand what does that mean?
What does that mean to go apply
for a credit card? There's a,
there's a lot of education that consumers
need, but at the end of the day,
this was a comment that was made
in a session earlier yesterday.
The credit score and mortgage is, is,
I just think of that as like the doorknob
to get in. It's just the front door.
It's actually the data that we've been
talking about that is used for the
underwriting. The GSEs don't actually
use a score in their underwriting.
All they use is the data and the trend
data that was pioneered about a decade
ago. Right? Which is much more data that's
used in the traditional score today.
So it's all about that data
that's in the score. And again,
the data is different across the bureaus.
If consumers have never
had more access to,
to content and information about the
mortgage process or the lending process or
their own credit data, why
are conversion rate's low?
So like, if consumers can go,
like, seek information about their,
their credit score and
and financial profile,
why are they going to lenders to to test
the waters if they could potentially
get that knowledge on their own?
Well, I think that consumers are shopping,
right? Yeah. Like they do for any,
which is a good thing.
Product, it's a great thing.
But it's tough for lenders.
It, it is, it,
it means that the lenders have to have
processes in place to be able to do that
evaluation fairly quickly.
And there's been a lot of tools that
have emerged over the last several years
that help pre-qualify a consumer without
posting a hard inquiry to their report
that allow the lender to have kind of
like a quick look into whether somebody's
probably gonna qualify or not. And that
goes beyond credit data, by the way.
There's income and employment and other
solutions that go into deciding whether
you're gonna be able to underwrite a
mortgage loan for somebody that you can
look at kind of before you go
through the full process. I,
I totally agree with you. In fact,
Bob, yesterday in the opening session,
I wrote down a quote, he said,
the supreme irony is that Fannie and
Freddie do not use the credit scores.
They get data, and then
desktop underwriter and loan
processor do their thing.
The credit score is used for price.
And I think one of the things we're
not talking about enough is, well,
first of all, I couldn't agree with
him more on that. Second of all,
it's not just the underlying data.
It's the innovation in the technology,
in the security, in the consumer support,
and how we answer questions for
consumers, how we educate consumers,
the tools that we give them,
the places that we go to be able to
communicate with them in a way that's
meaningful. For example, Experian
has a, a partnership I'm super,
super involved in and proud of with
home free USA that helps with black and
brown communities.
And getting the word out through
means that really resonate with folks.
It's about a lot more
than data or a score.
It's about how you manage
it, how you educate about it,
how you get it out there into the world.
You mentioned innovation innovation is,
is clearly something that's happening.
But in the same sentence
here at MBA annual people
are talking about regulation.
Yeah. Do you see regulation as something
that's pushing forward innovation or,
or holding it back?
Like what is this relationship between
those two really important topics?
I mean, the three of us have lived in
a world where you have to innovate.
I mean, financial services is one of the
most highly regulated industries. Yeah,
absolutely. Out there. Absolutely. And
rightfully so, right? Rightfully so.
So the three,
our three companies have had to innovate
within that infrastructure since we
started. I do think that
sometimes regulation and or,
you know, some of the folks who oversee
the industry can help that along,
for instance, the FHFA's Yep.
Adoption of an enablement of scores
like Vantage 4.0 or more modern
scores just in general that take into
account the data and the processes and
everything else that we've been talking
about here today. That's gonna help.
Because the GSEs needed to be able
to accept scores that they weren't
accepting before. And so there are
times when regulation prompts it.
You've seen all three of us
put some of that innovation,
some of that value add
back into the industry very
publicly and committing to do
that on our investment to help
the industry move forward.
Can you share what's the most important
innovation that Equifax is bringing
forward right.
Now? Yeah. So from our perspective,
we have a couple of data
repositories that are unique,
telco and utility and,
and that type of pay service history.
The other is our work number.
And so we've taken elements from both
of those product sets thanks to some of
the, the work we've
done on transformation.
And we're making that available with
the credit for the exact thing that
Michelle was referring to.
Allow people to make better decisions
right at application before they spend all
of the money to get somebody to a close.
In the spirit of fierce competition.
I'll let Michelle and Satya absolutely
share their innovation as well.
Absolutely. You want to jump in? Yeah.
Sure. So, you know, we,
we announced that we're gonna continue
to add more of that alternative data into
the mortgage credit
file rental. I mean, I,
I want to just build on what
Michelle mentioned. You know,
the leadership from Director Pulte and
the FHFA to advance the adoption of
scores, like Vantage
score. One of the big,
I think one of his follow up messages
on X was about now using rental trade
lines and that being part of, part of
what homeowners can, can rely on. So,
you know, we want to double down on that,
add more of those rental trade
lines to, to, to the file as well.
And then you know, short,
short term lending is another data set
that we invested in a few years ago.
You know, we have
research that shows that,
especially for that marginal consumer,
maybe the FHA or the
first time home buyer,
those consumers that are under a
six 20 or or six 50 a short term
lending tray line actually is positive
for them. It's not a negative signal,
it's a positive signal. 'cause Again,
it could be the first time they have,
they're interacting with credit. So again,
we want to help achieve that mission
of getting people into homes safely.
And then in an expanded way.
Yeah. And in some, I'm
sorry, go ahead. Yeah.
Michelle's turn.
Transition.
Keeps coming out.
Back guys.
I totally agree.
Experian invested in one of the largest
rental databases in the country 10 or 15
years ago called Rent Bureau.
But we had to go beyond that because
so many folks rent from individual
landlords or, you know, not a
property management company. Right.
And so we innovated
with things like Boost,
which allows consumers to work with
their bank account to be able to show
they're paying their rent on time every
month and permission it themselves into
the file. We've got relationships with
80 million people in the United States.
And to get them to opt
into reporting that,
or utility information or how they pay
their Netflix account and everything can
really, really create a file
where one didn't exist before.
Our most recent innovation that we just
launched fairly recently is cashflow
attributes and scores so that lenders
can augment traditional credit
debt repayment with how
somebody's actually managing
their money on a month to
month basis.
And that augments and adds a tremendous
amount of value to who you might want to
lend to and how responsibly
they're gonna pay you back. Okay.
And one of the things
I was gonna build on,
what Satyan said I think is
important is and what Michelle said,
we've competed really hard in the consumer
finance space that loves more data.
They want all these things we've
been talking about. The, you know,
the announcement by Director Pulte about
Vantage kind of opened the door to a
lot of people in the industry learning
maybe for the first time, wait,
there's more data that could be here
versus what we've been using for a number
of years. Yeah. So that
door has been open now,
and I think that's really valuable to
the mortgage industry to start realizing
what else is out there.
I think that's important,
what you just said.
That door has been opened in the
mortgage industry mm-hmm .
It's been open in almost
another credit categories,
other lending category for decades.
Yep. That's right.
And I think that's the point of we've
had to compete the market enables us to
compete. It forces us to compete. And
we have been competing. And you know,
I think all of us have stories of, you
know, what acquisitions have we made,
which angle do we want to compete
on? And, and it's, it's, again,
it's every day that we go to work and
think about how do we differentiate it.
It.
Feels like more data is always
something that, that people want.
But one of the trends and
the talking points I've hear,
heard here at MBA annual is the
potential move from tri merge to a,
a buy merge or even situations where a
single report could be the solution for
lenders. That's kind of a move
away, the move to, to less data. I,
I have a feeling that's something lenders
are, are pretty curious about. Like,
is this, is this coming up
the pipe? What, what are,
what are the hurdles toward moving toward
a buy merge and what might some of the
risks be?
You're looking at me. Yeah.
I, I'll be happy to jump in.
So there has been a lot of talk
about that this week. And you know,
in some cases that's exciting.
In some cases I'd love to see the dialogue
maybe shift a little more to how do
we help more,
more people actually get into homes versus
a little bit of the economics on the
credit side. But happy
to have that dialogue.
I think it's a very slippery slope. And
so I'll actually start in non-mortgage.
There's a lot of big lenders in today's
world that pull three credit files
or two credit files in the auto space,
or even the credit card space because
they believe that there's differences and
they want to see those differences
because they believe it gives them a
competitive edge in making better
decisions and pricing their products more
aggressively. So that is
someone that has total choice.
They could go with no credit
score, no credit file,
and they're choosing to buy three.
And we're seeing that more and more in
the industry when it comes to mortgage.
It really comes to the
lost applications. The,
the whole drive is an
economic drive. Yeah.
If we're talking about what is the best
way to get consumers into homes and to
qualify more consumers, it is more data.
And I haven't heard anybody really give
a solid argument as why that's not true.
All of the arguments I've heard have
been very much financially based,
which I respect.
And I think that all of us are working
together with the different options to
say, how do we help upfront
on the shopping behavior Yeah.
To, to control cost a
little bit more. But we,
we maintain that very proven safety
and soundness on the back end
so that the consumer gets the best price
possible and that the American taxpayer
is backing good quality loans.
And it's all ties back to, for a
score that scores more people, that,
that takes account for all of this
data that we just talked about. Yep.
And so we, I think all
of us understand that,
that kind of financial conversation.
One of the things, and again,
this came up as well yesterday from
Stan, from from Freedom Mortgage,
thought he made a great point of the
US housing system is truly the envy
of the world, right? It's, it's a,
it's kind of a remarkable way to match
capital with people looking to buy a home
and getting to a home in a very
efficient and a very safe way. Right?
And a safe way to get people.
Now what is, you know,
the average mortgage
is well over $400,000.
You're getting up to a million dollar
mortgages, you know, to, to pay maybe 10,
$15 more for credit data to keep
that system going seems like,
like it's worth it.
Yeah. I think that, you know, well,
yeah, go ahead. You were about to.
No, I wasn't. I was, I was I
mumbled? Well set . Oh.
. Yeah. Okay. I think that,
I think that it's an interesting time to
contemplate reducing the amount of data
that you use to make decisions.
'cause There was so much change going on
in this industry right now in mortgage
in general, but certainly with
regard to how you evaluate risk,
you've got everything from technology
changes and AI factoring into decisions
and everything else to introduce reducing
the amount of data that you take in to
how you've known decisions have been
made for the last 20 years or so.
I think that timing is really interesting.
I mean,
I think the timing is tied around coming
out of a pretty challenging time period
for the industry, and people
are, are hunting for margin.
And I think Director Ty's commentary on,
on x and bringing competition to the
market, he, he's very price focused. I,
I think with the lens of benefiting
the consumer and and how,
and some of these costs do
flow to the consumer. Yeah.
I, I would like to comment though,
building on this. In today's world,
the lender has the ability,
the choice to have one credit bureau
to bring that in and to start the
underwriting process.
They're not required to have all three
until later in the process. Yeah.
But what we see from many lenders is
they've had that bad experience for a
borrower that they got closer to
close, got the other credit scores,
and they had to go back to that
borrower and change the rate.
And that's a bad experience
for the borrower.
It's a bad experience for the lender. And
that sometimes results in a lost loan.
So we see people voluntarily saying,
as soon as I know somebody
qualifies and they show me any sign,
I'm gonna move forward.
They want to make sure they
have all three credit bureaus.
And that is because the loss of
a loan is so much detrimental
to, compared to the cost of
getting data to do the loan. Right.
And it also reiterates that they know
there's enough variation between our
different credit bureaus that it's going,
it has a high potential of changing when
it goes to that final pricing sheet.
And so there's a choice
today, there's options today,
and we see people choosing with their
pocketbook to buy more data sooner to make
sure that the experience for their
customer is that that lender closes that
model.
Yeah. Are there any,
are there certain lenders or like
whether we're talking about wholesale and
broker channel or the independent bank
or depositories that might choose one
path over the other or
pulling all three out the,
the gate versus a single
report? Or is that kind of a, a,
a lender by lender decision?
Yeah, I could take a trends.
Yeah. I mean, I,
I would say one thing maybe adding onto
what Joel said is that the consumer
experience is real, really important on
the consumer having that certainty and,
and again,
getting credit for all of what they've
done in their credit file or in their
relationship to credit. There's
been conversations about other,
other lending lines. Again,
Joel said very rightfully so,
that in other lending lines,
multiple reports are used also.
Those are those lending lines that consume
this alternative data way more than
mortgage does. So it's good to see
mortgage moving in that direction.
But my point here is that typically a,
a borrower and even their broker or
their loan officer may not know exactly
right up front which loan product is
best for them. It could be a GSE loan,
it could be a non QM loan. It could be
a VA loan. Right. And I, I think again,
the, to be able to cast the net as widely
as possible to get the consumer in the
right product, taking a look
at all three bureaus and,
and really using a trended score
like vantage score is probably,
is the best answer to get the best
option from the consumer. That's right.
The, the other piece I would put on
that, around the three bureaus and,
and that is if we go to one eventually,
like in any area, the models
are gonna change a little bit.
So if you know that the broker is picking
the highest score or you believe that
yeah. And you're seeing a seven 30,
you probably eventually will see some
of the pricing price that more like a
seven 10 or a 7 0 5 because they have
to take into account what they're not
seeing. So the absence of data punishes
the consumer from a pricing perspective.
And I, I think that's one of the risks
that we really haven't contemplated.
But I will tell you, if you
listen to enough of the panels,
and there's been a lot of them in
the last six months on this topic,
a lot of our leading lenders are
out there sharing that information.
They truly want to get the
best loan for the customer.
And so there's a decent chance they're
still gonna buy all three bureaus.
It's just they're gonna
put the best one forward.
So then the overall ecosystem will have
to adapt somewhat to that approach.
That's right. Alright, so let's
bring this back to MBA annual 2025.
Credit reporting has been a hot topic.
One of the breakout sessions
yesterday was a complete,
like overflow standing room only.
So it's clearly something people are
talking about here in Las Vegas this week.
Michelle,
can you kick us off with one of the
biggest misperceptions that you're,
you're hearing here at MBA annual or you
hear from clients and interactions that
you'd like to set the record
straight on or bring clarity to?
I mean, I think TU has started off
this session with the biggest one,
which is that the bureaus don't compete
or that there's not innovation happening
within data or the credit bureau industry.
Because like we said,
mortgage is the only space that
requires three bureaus to be pulled.
We've been competing on that
underlying data for decades,
innovating building on top of it,
trying to represent the consumer as
completely as we can. And so for me,
that's the biggest misperception I keep
hearing over and over again at this
conference.
You only, I I think you hit, you
guys hit the main ones on the point.
I did hear,
hear an individual stated that three
credit bureaus is not good for the
consumer. And I, I don't
believe that in any way.
I think that is a misconception,
and I think that's the spirit of the
conversation, that more data is better.
What do you think that that
person's perception was? Why I.
I think it was fi purely
financial financial pricing.
Maybe we can save 30 or
$40 on that closed loan,
which all of us know is such a small
drop. I mean, it, it's less than you know,
a percent, percent and a half
Yeah. Of the total closing cost.
To secure a loan in the most sound
housing market in the world seems a little
ludicrous at times that we're spending
this much energy talking about it.
But I'm glad we are. I think you know,
you started this conversation talking a
little bit about education and how are
we doing that?
It's what's become really obvious in the
last couple of months is the vast need
for education, not only for the
consumer, but even our, our customers.
Yeah. So on the customers, and
this, this is gonna be the,
the actual last question .
But as we approach a a period with,
with lender choice and, and vantage score,
what do lenders need to do to get prepared
and what moves they need to be making
today to prepare for 2026? That
seems to be like the head scratcher.
I I do hear pretty often, Michelle,
please kick us off and close out. Yeah,
I mean, close.
Out, I think separately, all three of
us have come to the table and said,
please, we will give you vantage for
right now so that you can evaluate it
in actual underwriting decisions and know
how it will play out in your portfolio
and in the real decisions
you're making over time.
The GSCs are gonna come out with their
guidelines for it here soon, you know,
possibly within the next month.
And then you'll know how you could
make decisions using it. Take, take,
take the score. Yep.
Okay.
Yeah. I would say eyes
on the score, like in,
in every aspect of the mortgage
process, as Michelle said,
we've all made it available. I
know that Fannie is starting to,
to add it on the backend and
the MBS pretty soon here.
So I just think eyes on the score start
to develop that Rosetta Stone with it,
an alternative to the score that's
been in market for 30 years. Okay.
And I would just wrap up. I, I think
they've hit it on the nose. So I,
I want to wrap up by saying thank you,
Clayton, for helping make this happen.
I'm just proud we had a
civilized conversation with
pretty fierce competitors.
Joel, Michelle , thank
you so much. Thank you. Thank.
You. Yeah.
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