Are joint (merged) credit reports allowed for joint consumer loans? For example, if two applicants have indicated their intent to jointly apply for credit, and each applicant’s income and assets will be used as a basis for our underwriting, may we obtain a joint credit report? If so, are there any privacy concerns regarding providing a joint report to two parties, and do different rules apply to married applicants? Also, Fannie Mae and Freddie Mac require “tri-merge” credit reports — does this pose any concerns?

Yes, you may obtain a merged credit report for co-applicants, in which vendors merge the information from two individuals’ credit reports — subject to the caveat that there may be some fair lending concerns if your vendor offers joint reports for married couples at a lower cost than separate credit reports for unmarried individuals. The FDIC stated in a 2012 fair lending presentation that if married co-applicants pay different fees than unmarried co-applicants, “an overt discrimination violation would be cited since a different credit report fee is charged on the basis of marital status.”

Additionally, we believe that you may avoid any privacy concerns related to merged or “joint merged credit reports” (the term used by Fannie Mae and Freddie Mac to refer to credit reports from more than one credit reporting agency for two more than one person) by refraining from providing copies of a co-applicant’s credit report or credit score to the other co-applicant.

If taking an adverse action, you should provide the co-applicants with separate adverse action notices containing only their own credit scores. The Federal Reserved noted in the preamble to its 2011 adverse action changes that “given privacy and customer relations concerns, the Board expects that creditors would generally provide separate FCRA adverse action notices to each applicant with only the individual’s credit score on each notice.” If you are required to provide a risk-based pricing notice, you must provide separate notices to each co-applicant containing only that co-applicant’s credit score.

Regarding “tri-merged” credit reports (which include credit information from all three credit reporting agencies), we do not believe such reports would pose any special concerns when collected for individuals. However, as noted above, using joint tri-merged credit reports could pose fair lending concerns if such reports are offered for married couples at a lower cost that separate tri-merged credit reports for individuals.

For resources related to our guidance, please see:

FDIC, Fair Lending Update (2012), slides 53–55:

“Emerging Issue 1: The first issue has been when banks charge a different credit report fee to married joint applicants who obtain a merged credit report (ex. $30) than is charged to unmarried joint applicants who obtain two individual credit reports (ex. $30 each or $60). In such cases, an overt discrimination violation would be cited since a different credit report fee is charged on the basis of marital status. The fact that the charge for credit reports is different substantiates the violation, not whether one group was harmed.

“Emerging Issue 2: The second issue has been when banks do not charge a different credit report fee (merged vs. individual) or when the same fee is charged for joint applicants, regardless of marital status. Since there is no difference in fees charged, you might initially conclude that no violation exists. However, analysis of the fees charged is only the first step in determining whether discrimination is present.

“Emerging Issue 2 (Continue): The next step is to determine whether the bank’s evaluation or analysis of credit bureau reports is different based on marital status, regardless of fees charged. Any difference in the evaluation process between married and unmarried joint applicants would constitute a violation for different treatment on the basis of marital status. Therefore, examiners will analyze a bank’s process for evaluating credit reports (merged vs. individual) for married joint applicants and unmarried joint applicants during the fair lending review.”)

Fannie Mae Single Family Servicing Guide, Section B3-5.2-02 (“An automated merged credit report combines the in-file credit reports from multiple repositories into a single report. A joint merged credit report includes all credit repository credit data on more than one individual applicant. The report must meet the following requirements: The report must include all information from three different credit repositories, or two repositories, if: that is the extent of the data available for the borrower, or the borrower’s credit information is frozen at one credit repository.”)
Freddie Mac Single Family Seller/Servicer Guide, Section 5203.1 (“A merged credit report is issued by a credit repository or a consumer reporting agency or bureau and includes the credit information from at least two credit repositories. A merged credit report includes all credit repository credit data for an individual Borrower. A joint merged credit report includes all credit repository credit data on two individual Borrowers. . . . If the Seller chooses to use merged or joint merged credit reports, Freddie Mac requires the credit repository or consumer reporting agency or bureau to obtain reports from at least two credit repositories for each Borrower.”)
Experian, 11 Credit Myths: Don’t Fall for ‘Em (“There’s no such thing as a joint credit report — for married couples or anyone else. Married or single, you have your own credit report, one that's linked to your Social Security number. If you're married, you and your spouse may have a lot of joint accounts, such as mortgages, car loans and shared credit card accounts. Those joint items will appear on both your credit reports and will affect both of your scores. But your credit report is yours and yours alone.”)
Final Rule, Equal Credit Opportunity Act, 76 Fed. Reg. 41590, 41596 (July 15, 2011) (“Section 202.9(f) of Regulation B permits a creditor to provide an adverse action notice to only one applicant, and requires a creditor to provide an adverse action notice to the primary applicant, when a primary applicant is readily apparent. In contrast, section 615(a) of the FCRA requires a creditor to provide the disclosures mandated by that section to ‘any consumer’ against whom adverse action is taken, if the adverse action is based in whole or in part on information from a consumer report. The FCRA's reference to ‘any consumer’ would seem to include co-applicants. Given privacy and customer relations concerns, the Board expects that creditors would generally provide separate FCRA adverse action notices to each applicant with only the individual's credit score on each notice.”)
Regulation V, 12 CFR 1022.75(c) (“Multiple consumers — (1) Risk-based pricing notices. In a transaction involving two or more consumers who are granted, extended, or otherwise provided credit, a person must provide a notice to each consumer to satisfy the requirements of §1022.72(a) or (c). Whether the consumers have the same address or not, the person must provide a separate notice to each consumer if a notice includes a credit score(s). Each separate notice that includes a credit score(s) must contain only the credit score(s) of the consumer to whom the notice is provided, and not the credit score(s) of the other consumer. If the consumers have the same address, and the notice does not include a credit score(s), a person may satisfy the requirements by providing a single notice addressed to both consumers.”)
FHFA, Credit Score Request for Input (December 20, 2017) (“Another aspect of this broader credit score project has been evaluating the current industry practice of using a borrower’s credit report and credit score from each of the three national consumer reporting agencies (CRAs) (often referred to as a ‘tri-merge credit report’). FHFA is evaluating whether to change from the current requirement of obtaining a credit report and credit score from all three of the CRAs to a requirement to obtain only two or one report and score from the CRAs for each mortgage applicant.”)