There is no question that the cost of credit reports has increased dramatically over the last year. Furthermore, there has been an abundance of finger pointing as to who is at fault…the three credit bureaus? FICO? The solutions presented were to switch to a bi-merge or even a “no-merge” single report. While these options might reduce credit costs, it could increase closing costs in other significant ways.
The bi-merge option was first proposed by former FHFA Director Sharon Thompson in October 2022. However, many mortgage industry stakeholders give considerable push back on this. When current Director Bill Pulte took over in 2025 he, at first, was also considering the bi-merge option. In July 2025 he reversed this plan, confirming that the tri-merge used today would remain in place.
The MBA (Mortgage Bankers Association) is currently pushing strongly for a no-merge, single report in hopes of significantly reducing credit report costs. They propose a single bureau is pull and if the score is above 700 that should be an option for lenders to use instead of a bi-merge or a tri-merge. Their argument is that this approach is already used by lending sectors such as credit cards and auto.
The most significant issue with either of these options is that it is providing and incomplete, therefore inaccurate credit report. Data furnishers are not required to report to all three bureaus. In a study done by Andrew Davidson and Co. “Scores based on data from a single NCRA differ from the current tri-merge standard often enough to impact loan pricing in meaningful ways. 35% of the 245 million scored consumers had at least one score that differed from the tri-merge standard by at least 10 points. 18% had a score that differed by at least 20 points, and 7% had a score that differed by 40% or more.”
These two options also open the door for “gaming” options. A borrower could easily pull their own credit reports and scores and upon finding the report with the highest score, suggest to the broker which bureau to pull. A broker could pull from different bureaus and choose the one or two to submit for underwriting. According to the MBA this would be regulated to hopefully eliminate any gaming attempts. However, regulating to such depth could, in and of itself, increase costs.
Other costs could increase as well. Mortgage Insurance (MI) and even overall loan pricing could rise due to the possible incomplete data on a report which increases risk uncertainly. Risk premiums and loan level pricing could rise in order to compensate for the risk. According to the Scottsman Guide “investors requiring higher compensation for the credit uncertainly may pass risk premiums down, leading to higher interest rates.”
Credit report costs are actually a small percentage of the closing costs. Per the CIDA (Consumer Data Industry Association) closing the percentage of a credit report is generally less that 1.5% of closing costs. This is minor compared to the costs of appraisals, title, and origination fees.
In a perfect world a conclusive answer would be for Congress to pass a law requiring all data furnishers to report to all three bureaus. That could make the option of a bi-merge or a no merge a more viable option. Until that happens both options only opens the door to a substantial increase in repurchase risk due to missing data on one or more of the bureaus.