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if you are getting a mortgage. (x-posted at Buying or Selling a Home)

Beginning June 25, Fannie Mae's credit scoring models will start including your "trended credit data" which shows not only your monthly credit card balances, but also the payments that you make on those balances each month. Potential borrowers who do not pay off their credit card debt in full (aka 'revolvers') will be considered riskier (and therefore, less likely to qualify) than those who do pay off their balances each month (aka 'transactors'), all else being equal. These models will not differentiate between those carrying balances at 0% vs. those paying interest.

Fannie Mae contends that looking at credit card payments can even help those potential borrowers who previously had a late payment, but generally pay their credit cards off in full each month

Giving weight to how borrowers pay off credit debt puts more power in their hands to control their credit evaluation. Payment delinquencies are a significant factor in credit scores, and borrowers can do nothing but wait for the delinquencies to grow ever farther back in time. But when trended data is considered, by paying credit card balances in full or in large part for a few months, borrowers can demonstrate that a late payment was not deeply reflective of their general debt repayment ability and behavior.

Based on Fannie Mae’s analysis, borrowers can potentially improve their evaluation by the DU credit risk assessment each month by paying off credit card bills in full.

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