New Andrew Davidson & Co., Inc. Research Demonstrates the Costs to Consumers and Investors of Moving Away from the Tri-Merge Standard in Mortgage Underwriting

NEW YORK, Feb. 20, 2026 /PRNewswire/ -- New research published by Andrew Davidson & Co., Inc. (AD&Co) demonstrates how moving from the tri-merge standard to a bi-merge or single-report standard could lead to less accurate mortgage pricing and qualification. This added uncertainty may lead to investors requiring higher compensation for greater risk, ultimately resulting in higher mortgage rates.

The study, titled "The Impact of Moving Away from the Tri-Merge Standard," analyzes the potential impact on the mortgage ecosystem of changing the tri-merge credit score standard to a bi-merge or single-pull standard. The analysis is based on an examination of a unique data set of VantageScore 4.0 credit scores for a broad range of consumers constructed from data provided by the Nationwide Consumer Reporting Agencies (NCRAs) Equifax, Experian, and TransUnion.  

Key findings include:

• Scores based on data from a single NCRA differed from the current tri-merge standard (median of 3 scores) often enough to impact loan pricing in meaningful ways. Of the 245 million scored consumers represented by the study data set, 35% had at least one score that differed from the tri-merge standard by at least 10 points; 18% had a score that differed from it by at least 20 points; and 7% had a score that differed by 40 or more points.
  
  
• For consumers in the 640–779 range, where 20-point differences guarantee a move into a higher or lower GSE pricing bucket (based on Loan-Level Pricing Adjustment categories, or LLPAs), these percentages were even higher. As an example, for a $350,000 GSE loan with a 90% loan-to-value (LTV) ratio, moving between consecutive pricing bins can raise or lower the combined cost of borrowing and mortgage insurance (MI) by $3,000 to $5,000 in present value (PV) over the life of the loan.
  
  
• The potential for pricing variances due to reduced information is greater for lower-scoring borrowers (i.e., credit scores of 600–639), about a quarter of whom were found in this study to have had at least one credit score that differed from the tri-merge standard by at least 20 points.
  
  
• In a non-tri-merge landscape, lending and pricing decisions that could be based on different credit scores may create an opportunity for originators to score shop during the origination process by choosing the credit score that produces the lending outcome they desire. Consumers choosing between lenders would also implicitly be shopping for the best score outcome. Based on the study, about 9% of all consumers (and 11% of those in the 640–779 range) could increase their purported credit score by 20 or more points from what the tri-merge standard would otherwise show.
  
  
• Establishing a score cutoff such as 700 to determine whether a tri-merge is required does not eliminate the existence of meaningful score discrepancies.

"We are going through a modernization phase in the mortgage industry," said Sanjeeban Chatterjee, Director of Behavioral Modeling at AD&Co. "At such times, it is important to understand the impact of the changes so that the stakeholders can make the right decisions. This study shows why knowing more is better from a risk management and affordability perspective."

A credit score predicts a consumer's credit risk, and the score may vary based on the data from the three NCRAs; using the tri-merge score captures a more complete picture of a consumer's risk. This study shows that moving to a single score or to a bi-merge approach increases the uncertainty in assessing borrower risk, with direct implications for loan pricing and underwriting decisions.  This increased uncertainty is greater for minority borrowers and for consumers with lower credit scores.

The full paper is available here.

About Andrew Davidson & Co., Inc.
Andrew Davidson & Co., Inc. develops and licenses prepayment and credit models, as well as risk measurement tools used as benchmark analytics by top mortgage and commercial banks, insurance companies, mortgage insurers, reinsurers, credit unions, broker-dealers, and investment management firms. Since its inception, the firm has provided clients with high-quality models, applications, consulting services, research, and thought leadership, all aimed at yielding advanced, quantitative solutions for an array of financial and investment management needs. For more products and services information, visit ad-co.com/models.

SOURCE Andrew Davidson & Co., Inc. (AD&Co)