
When you’re stepping into the world of home buying or refinancing, one term you’ll likely encounter is the Residential Mortgage Credit Report (RMCR). Unlike the standard consumer credit reports, RMCRs play a vital role in the mortgage underwriting process, providing lenders with a comprehensive overview of your financial stability and creditworthiness. Here’s an in-depth look at RMCRs:
What is an RMCR?
An RMCR is not just another credit report. It’s a specialized document that mortgage lenders use to assess the risk of lending substantial amounts of money over long periods. Here’s what sets it apart:
Comprehensive Data: An RMCR merges information from all three major credit bureaus – Equifax, Experian, and TransUnion. This “tri-merge” approach gives a fuller picture of your credit history than a single bureau report.
Additional Details: Beyond credit scores, an RMCR includes employment history, current income, and public records like bankruptcies, foreclosures, and tax liens. This makes it a more detailed tool for lenders to evaluate your financial situation.
Validity Period: Typically, RMCRs are considered valid for 90 days, which aligns with the usual timeframe for mortgage closings. However, if there are delays or updates needed, another report might be pulled.
Why Use an RMCR?
Risk Assessment: For lenders, a mortgage isn’t just another loan; it’s a significant investment. An RMCR helps in understanding not just your credit behavior but your overall financial health.
Compliance with Standards: Agencies like Fannie Mae and Freddie Mac have guidelines that often require an RMCR for loan underwriting to ensure compliance with mortgage lending standards.
Accuracy and Completeness: By consolidating data from multiple sources, RMCRs minimize discrepancies that might exist between individual credit reports, offering a clearer, more reliable assessment.
The Process of Obtaining an RMCR
Lender’s Initiative: Unlike consumer credit reports you might check for personal use, RMCRs are ordered by your lender or mortgage broker. These reports are not typically available for consumers to pull themselves.
Third-Party Compilation: Mortgage reporting agencies or companies compile the RMCR, ensuring all data is up-to-date and merged into one readable format.
We provide 3 bureau merged RMCR reports
Impact on Your Mortgage Application
Credit Scores: An RMCR will show three credit scores, one from each bureau. Mortgage lenders usually consider the middle score or, in joint applications, the lower of the two middle scores.
Potential for Discrepancies: Since each bureau might have slightly different information or reporting methods, your RMCR might highlight issues not visible in a single report, like undisclosed public records.
Preparation: Knowing all this, it’s wise for potential borrowers to check their credit reports from all three bureaus to preempt any surprises that might appear in an RMCR.
Conclusion
RMCRs are a crucial element in the mortgage landscape, offering lenders a detailed, multi-dimensional view of your financial trustworthiness. Understanding what they are, how they are used, and their implications can help you prepare better for the mortgage application process. Remember, while you can’t order your own RMCR, maintaining good credit across all bureaus and being aware of your financial history can significantly influence your mortgage approval and terms.
For those considering buying or refinancing a home, keep an eye on your credit health, as it’s not just the numbers but the full story of your financial behavior that counts.
We have individual, joint and merged RMCR credit reports in a JSON API