Cost of credit reports for mortgages center of debate. What to know

There’s a line item in homebuyers’ closing costs that’s causing a clash in the mortgage industry: the fee for lenders to check borrowers’ credit.

While the charges — typically in the tens or hundreds of dollars — represent a tiny slice of the amount that buyers pay when a home purchase is finalized, the cost has risen sharply in recent years. Costs in 2026 could rise an average 40% to 50%, according to a Dec. 12 letter from the Mortgage Bankers Association to Federal Housing Finance Authority Director Bill Pulte.

The trade association asked the FHFA to give mortgage lenders the option of relying on a single credit report instead of three — known as a “tri-merge” report — for borrowers with a credit score of 700 or higher.

Although lenders generally have required a minimum credit score of 620 (on a typical scale of 300 to 850), Fannie Mae, a government-sponsored enterprise and buyer of mortgages, said in November that applications processed through its automated underwriting system would no longer require a minimum score.

Nevertheless, most homebuyers have higher credit scores, and so stand to benefit from such a change. In 2024, the average credit score for a first-time homebuyer was 734, according to the Federal Reserve Bank of New York. For repeat buyers, the average score was 775.

The FHFA oversees Fannie Mae and Freddie Mac, which are the largest purchasers of mortgages on the secondary market. Currently, lenders that want to sell mortgages to Fannie and Freddie — most do, because those transactions provide them with capital to make more…