Tri-merge credit reporting restricts competition among the three dominant credit bureaus, Equifax, Experian, and TransUnion. This lack of competition results in inflated closing costs for mortgage buyers. The Mortgage Bankers Association highlighted the issue, advocating for reforms to promote competitive pressures. In 2022, the Biden administration proposed alternatives to tri-merge reports, including bi-merge credit scores and new credit models. However, these proposals faced industry opposition and were not implemented, affecting potential reforms that could benefit homebuyers and renters through better credit evaluation practices.
Equifax, Experian, and TransUnion dominate credit reporting, but government policies requiring tri-merge credit reports hinder competition and inflate mortgage closing costs for buyers.
Reform proposals by the Biden administration aimed to enhance competition among credit bureaus included bi-merge credit score options, which were never implemented due to industry opposition.
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