What Is Trended Data in Credit Scores?

What Is Trended Credit Data?

Credit reports can contain thousands—even hundreds of thousands—of data points. Trended credit data refers to the trends that can be drawn by connecting these data points.

For example, your credit utilization ratio is the portion of your credit limit that you’re using on credit cards and other revolving accounts. It’s an important credit scoring factor, and credit scores calculate your utilization rate based on what’s in your credit report.

Many credit scoring models only consider the most recently reported balance and limit, and your resulting current utilization rate. But changes in utilization could also offer important insights.

Someone whose utilization rate is steadily decreasing may be moving into a better financial position. Conversely, someone who is using more and more of their credit limit might be struggling. Even if both people have the same utilization rate today, the first person might present less risk to a creditor. And that’s why analyzing trended credit data can be helpful.

How Can Companies Get and Use Trended Data?

Creditors can create or get access to trended credit data in several ways:

• Identify trends on their own: Large creditors may have the resources to identify trends in consumers’ credit reports on their own. They might use these insights to create their own credit scores or supplement the credit scores they buy.
• Purchase trended credit data attributes: The credit bureaus sell credit attributes, including trended credit attributes that can highlight trends in the credit report. Creditors can order the attributes as add-ons when they buy a credit report.
• Use credit scores that consider trended data: Creditors can choose to use credit scores that consider trended data when calculating a consumer’s score.

Creditors could use trended credit data the same way they use your credit history and credit scores. Trended data isn’t new: Creditors have been using it for years. It also isn’t distinct from other credit data. It’s just another way of looking at the information to try to better predict risk.

Some of the ways creditors use trended data is:

• To review credit applications: They might consider trended data when deciding to approve or deny a credit application, and to set the interest rate, terms and credit limit or loan amount on a new account.
• To manage accounts: They might use trended data to help manage their existing accounts. For example, a credit card holder who consistently has high balances and pays their bill in full might get a credit limit increase. But a cardholder who used to pay their bill in full and is now making smaller payments might have their credit limit decreased.

What Types of Trends Can Impact Your Credit?

Creditors and credit scoring companies try to identify the trends that can best predict the likelihood that a consumer will miss a payment in the future. Some of the types of trends that they might consider include:

• Changes in your credit card balances
• Changes in your average credit utilization ratio
• The highest credit utilization ratio you had during a specific period
• How much you paid over the minimum amount due, either as a dollar amount or percentage, on credit accounts
• How often or how many times you went over a credit card’s credit limit
• The number of credit limit increases or decreases you received
• Trends in late payments on various credit accounts

Generally, the trended credit data won’t look back indefinitely. Recent trends may be more predictive of someone’s current financial situation, so creditors and credit scoring companies might focus on trends from the most recent three, six, 12 or 24 months. Some trends may also be specific to a certain type of credit account, such as credit cards, student loans or mortgages.

How Can Trended Data Impact Your Credit Score?

Trends in your credit history can impact certain credit scores and affect your overall creditworthiness.

• Only some credit scores consider trended data. Most FICO and VantageScore credit scores don’t consider trended data, so trends in your credit report won’t affect those scores. Two exceptions are the VantageScore 4.0 and FICO Score 10 T models, which consider trended data from the previous 24 months.
• Trended data supplements existing scoring factors. Trended credit data could be incorporated into existing credit scoring categories. For example, the changes in credit utilization over time might be considered within a credit score’s “amounts owed” category.
• It might impact people who have good credit the most. Trended data might have the largest impact on people who currently have good or very good credit scores. Those with positive trends might score even higher, and those who have a high score but have worrisome trends might score lower.

Creditors that don’t use VantageScore 4.0 or FICO Score 10 T could still consider trended data. Some might build or use different types of credit scores that incorporate trended data. Or, they might combine a credit score that doesn’t factor in trended data with trended credit attributes.

Learn more >> Why Is Credit Important?

How to Improve Your Credit With Trended Data in Mind

How you’ve managed credit over time could become increasingly important as creditors have several ways to get and use trended credit data. Keep this in mind and try to:

• Pay at least the minimum payment due to avoid late payments
• Try to make more than minimum payments on credit cards
• Try to make more than the required payments on installment loans
• Consistently pay down loans and credit balances over time
• Maintain low utilization rates on revolving credit accounts, such as credit cards

Understandably, some people won’t be able to afford to consistently make large payments or avoid high balances. But you can still set this as a goal, as these same behaviors can also help you get out of debt and save money.

Monitor Changes in Your Credit

You can create an Experian account to check your credit report and get credit monitoring for free. Your account can also show you some historical trends, such as your credit card balances and credit score over time. When you’re ready to apply for a new credit card or loan, you can also use your account to get matched with offers based on your credit profile.