Consumers may not know it, but financial institutions often rely on “bundled” credit reports to make more fully informed decisions before lending an individual money.
That process is known as a tri-merge credit report (or a three-in-one credit report). The merged report can give the lender a more complete picture of an applicant’s financial situation, since each credit report may contain slightly different information.
You can’t request a merged credit report on your own, but you can ask a lender to share their tri-merged report with you. Read on to learn more about what tri-merged credit reports are and how they can impact your chances of getting a loan.
Table of Contents
- What Is a Tri-Merge Credit Report?
- How Do Merged Credit Scores Work?
- Why Do You Have More Than One Credit Score?
- What Does a Tri-Merge Credit Report Look Like?
- Why Do Personal Loan Lenders Look at Your Tri-Merge Credit Report?
- How Does a Tri-Merge Credit Report Affect Your Loan Application?
- Is a Tri-Merge Credit Report a Hard Inquiry?
- Can I Order My Own Tri-Merge Credit Report?
- FAQ
Key Points
• Tri-merge credit reports combine individual credit reports from the three main credit scoring companies.
• Lenders use tri-merge credit reports to obtain comprehensive details of a loan applicant’s credit status.
• An individual can have multiple credit scores depending on the company calculating the scores and on the type of loan they are applying for.
• A strong credit report can improve the chances of a loan approval and the terms of the loan.
• A tri-merge credit report can be requested by a third-party and is a hard inquiry that reduces the applicant’s credit score temporarily by a few points.
What Is a Tri-Merge Credit Report?
A tri-merge credit report simply combines three credit reports from the three largest credit reporting bureaus (or credit scoring companies) — Experian, Equifax, and TransUnion — and consolidates them into one credit report for creditors and lenders. They are most commonly used in the mortgage lending sector, in which more information is required to properly assess larger loans.
Creditors often rely on three-in-one credit reports because they want a thorough review of an applicant’s credit history, which they may not get with input from just one credit reporting agency.
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How Do Merged Credit Scores Work?
A tri-merge credit report gives lenders a comprehensive overview of a credit applicant using information from three credit reports, instead of just one or two credit reports.
Because the credit scoring formulas and outcomes from all three bureaus are combined in the single tri-merge credit report, creditors can get an expanded and more complete look at a credit applicant’s financial history (including payments and credit usage).
Recommended: Common Credit Report Errors and How to Dispute Them
Why Do You Have More Than One Credit Score?
Each credit scoring company uses a particular model and formula for calculating credit scores. One model may place more importance on one factor, such as payment history, than another model. Also, different types of loans have different scoring methods, meaning that you’re likely to have a different score for each loan type.
The most commonly used credit scoring model is the FICO® Score, a base score that ranges from 300 (lowest score) to 850 (highest score). FICO has various models, including versions with industry-specific ranges.
• The FICO® Auto Score Range is 250 to 900.
• The FICO® Bankcard Score Range is 250 to 900.
• The FICO® Mortgage Score Range is 300 to 850.
VantageScore is another credit scoring model that all three major credit reporting bureaus use.
FICO Score and VantageScore base their calculations on different aspects of a person’s financial history.
• FICO uses factors that are in a credit report, such as payment history of credit accounts, how much debt a person has, how long credit accounts have been open, how often new credit inquiries happen, how often new credit accounts are opened, and the mix of credit account types.,
• Vantage uses the same criteria as FICO but places different levels of importance on each. VantageScore may consider rent and utility payments if they are reported to the credit bureaus. This allows people who don’t have much of a credit history to have a credit score and be able to access consumer credit.
Lenders use credit scores and other information in the loan approval process.
Recommended: What Is Considered a Fair Credit Score?
What Does a Tri-Merge Credit Report Look Like?
Tri-merge credit reports offer creditors the same look and feel as a standard consumer credit report, with a few differences.
For starters, the third-party provider creating the three-in-one credit report culls the credit reports from each of the three primary credit-reporting firms (Experian, Equifax, and TransUnion) and pulls the most pertinent information for use in the tri-merge credit report.
In its final form, the tri-merge credit report includes the following sections.
• An upfront summary that provides information on the credit applicant in capsule form.
• A full section on the credit applicant’s financial accounts, focusing on larger accounts such as mortgages, credit cards, auto loans, and types of personal loans.
• Data on the applicant’s credit payment history, open accounts, history of late or no credit payments, tax liens, bankruptcies, and credit utilization ratio (i.e., the applicant’s outstanding credit balance divided by the total amount of revolving credit the applicant has available).
Why Do Personal Loan Lenders Look at Your Tri-Merge Credit Report?
Tri-merge credit reports are more commonly used in mortgage lending than in personal loan lending. But if you’re applying for a large personal loan — some lenders offer personal loans up to $100,000 — the lender may look at a tri-merge credit report to get a comprehensive picture of your creditworthiness. The tri-merge credit report will include any current or past personal loans and your payment history on those. The lender will use that information to determine approval for the loan you’re applying for.
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How Does a Tri-Merge Credit Report Affect Your Loan Application?
Different lenders approach the risk of lending money with different tolerance levels, just as they each have different credit score requirements. A loan applicant whose credit reports don’t include late payments and unmanageable debt loads will likely be approved for a loan with favorable terms and lower interest rates.
Alternatively, a loan applicant whose credit report shows a large amount of existing debt and a history of late or missed payments may be offered a high interest rate and less favorable terms.
Because lenders that use a tri-merge credit report to assess an applicant’s creditworthiness are looking at a comprehensive picture, it’s in the best interest of the applicant to clean up their credit reports from each of the three major credit bureaus before they begin applying for a loan.
Is a Tri-Merge Credit Report a Hard Inquiry?
Any official lender review of a tri-merge credit report will be a hard inquiry and will temporarily impact your credit score. In general, each hard credit inquiry can decrease a credit score by five points. That same decline is more noticeable with lower scores than higher ones, which is why those with lower scores may perceive a greater impact.
Multiple credit report hard inquiries within a 30-45 day period are typically listed as a single hard pull.
Recommended: Soft vs Hard Credit Inquiry: What You Need to Know
Can I Order My Own Tri-Merge Credit Report?
Tri-merge credit reports are available to lenders, but not generally to individuals. However, a lender may be willing to share with you the tri-merge credit report they pulled in your application process. A credit counselor who offers first-time homebuyer programs may also be able to pull a tri-merge credit report for you in a credit review process, but they may charge a fee for it.
However, you can — and it’s a good idea to — request a free copy of your credit report from AnnualCreditReport.com.
You can request a free copy of your credit report once a week from each of the three major credit bureaus. Reviewing all three of your credit reports will give you much of the same information that’s included in a tri-merge credit report.
The Takeaway
Tri-merge credit reports can prove highly useful to mortgage and other lenders looking for a comprehensive review of an applicant’s credit history. By merging the credit report analysis of the three major credit reporting agencies, creditors and lenders are getting a fully-formed outlook they likely wouldn’t get by relying on a single credit reporting agency.
For consumers, the main takeaway of three-in-one credit reports is simple — take a disciplined and diligent stance on your credit, review your credit reports regularly, and ensure decisive issues, such as on-time payments and credit utilization rates, are in good standing.
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FAQ
What is a tri-merge credit report?
A tri-merge credit report is a credit report combining information from the three major credit bureaus, Equifax, Experian, and TransUnion. Lenders use these reports to determine whether to approve a loan application and under what terms.
Is a tri-merge credit report a hard inquiry?
When a tri-merge credit report is pulled during the formal loan application process, it will be a hard inquiry on the applicant’s credit report. Hard inquiries cause your credit score to dip by a few points for a short time.
Can I pull my own tri-merge credit report?
No. Tri-merge credit reports are available to lenders, not individuals, and they’re mainly used in the mortgage loan process. If you’re working with a credit counselor, you may ask them to pull your tri-merge credit report during a credit review process.
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