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© Fannie Mae Single Family Selling Guide

Credit Utilization

When manually underwriting a loan, the lender must review the borrower’s credit report to evaluate his or her use of revolving credit by comparing the current balance on each open account to the amount of credit that is available to determine whether the borrower has a pattern of using revolving accounts up to (or approaching) the credit limit. Patterns of revolving credit spending are credit risk indicative.

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Note: Lenders are not required to analyze trended credit data in the credit report. See B3See B3-5.2-01, Requirements for Credit Reports, for additional information.Additional Information:  https://www.fanniemae.com/content/guide/selling/b3/5.3/05.html