LendingTree Flags Rising Credit-Report Fee Causing Closing-Cost Friction

LendingTree flags a small fee that's causing outsized friction

Credit-report fee emerges as contested closing-cost item

Mortgage lenders are increasingly clashing with borrowers over credit-report fees — a modest line item that is rising fast and prompting industry-wide debate that directly affects online marketplaces like LendingTree. The Mortgage Bankers Association warns these charges could increase 40% to 50% in 2026 and asks the Federal Housing Finance Agency to allow single-bureau credit pulls for borrowers with scores of 700 or higher instead of the customary three-bureau "tri-merge" reports. For comparison-shopping platforms that advertise low rates and transparent fees, such shifts can change upfront cost estimates and consumer trust in advertised deals.

LendingTree and similar marketplaces are particularly sensitive because their value proposition depends on clear, comparable cost disclosures across competing lenders. A move to single-bureau pulls for higher-scoring borrowers could reduce the portion of closing costs tied to credit reporting and streamline loan processing, improving conversion rates for borrowers who qualify. At the same time, any regulatory or agency-driven change in acceptable underwriting or disclosure practices quickly propagates through lenders that sell loans to Fannie Mae and Freddie Mac, which sets standards that many originators follow to remain marketable.

Industry participants caution that cost reductions come with trade-offs. Critics say moving away from tri-merge reports reduces redundancy in credit verification and could weaken fraud detection and underwriting rigor, potentially increasing downstream risk for servicers and guarantors. LendingTree and other marketplaces must weigh how changes affect both consumer-facing pricing and the stability of loan products they steer customers toward, while updating calculators, lead-matching algorithms and fee disclosures to reflect new practices.

FHFA, Fannie changes shift landscape

The debate follows a broader loosening in underwriting: Fannie Mae recently removes a minimum credit score from its automated underwriting system, a shift lenders note even as many historically require scores above 620. With average credit scores of 734 for first-time buyers and 775 for repeat buyers in 2024, many borrowers stand to benefit from procedural streamlining, but the FHFA’s oversight role means changes are subject to regulatory scrutiny and industry pushback.

Consumer protection and operational ripple effects

Trade groups and regulators are urging careful oversight to balance cost savings with consumer protection and market stability. For LendingTree, the immediate task is operational: adapting disclosure language, retooling cost estimates and communicating clearly to borrowers how credit-reporting practices affect closing costs and loan quality.