MIND YOUR BIZNESS
How will Trended Credit Data
help My Credit Scores?
Article from Vantage Score
(BPT) - Ever since the dawn of credit reporting, the information has looked relatively the same. Your lenders reported information to one, two or all three of the national credit reporting companies (CRCs) based on your most recent loan payment activities and balances. This method of reporting is informally referred to as a "snapshot in time" because your credit reports represented information based on any one single day in your credit lifecycle. And because credit scoring systems consider the information on your credit reports at the exact time your credit report is accessed or "pulled," your scores are also based on a snapshot in time and not necessarily the actual balances on your credit accounts that particular day. The credit reporting and scoring systems have operated under that structure for the better part of the last three decades.
Newer credit report data
Over the past several years the CRCs have been collecting and maintaining information that represents how you
manage your balances and payments over time. This information is formally referred to as "trended credit data" or "time series" data. The information includes the chronology of your balances, your minimum payment requirement and often your actual payment amount. For example, reports and the scoring models based on them can now decipher between whether you have an account with a balance averaging $4,000 over the past six months versus someone who charged the same amount just in the previous month but normally has a lower balance.
This represents a considerable upgrade in credit report information. Rather than a credit report representing a snapshot in
time, it now represents your most current balances and payments for the past 24 months.
How trended credit data can help my scores
Credit card users who pay their bill in full each month don't pay interest. So, there's a tremendous savings to never revolving a balance. But it can also improve your credit score if the scoring model leverages trended credit data. That's because those who pay off their balances every month can be identified and rewarded for practicing this positive credit behavior.
A model that includes trended credit data also takes into account whether a