Credit Reports
Credit Reports: Since small cap commercial loans are credit score driven, lending sources require a copy of the prospective borrower’s credit report. This can be accomplished in a couple of ways:
1) Borrower pulls own credit report, through any number of web sites, including www.MyFICO.com or www.IdentityGuard.com.
2) Lending source pulls credit report: If/when the lending source issues a Letter of Approval and the borrower accepts it, conditonally based on a minimum credit score (as required by the particular loan program borrower is applying for), the lending source will pull a “tri-merged” credit report (for a $25.00 fee).
* Credit Report Notes:
*Under Federal law, you are entitled to a free copy of your credit report (once a year) from each of the major credit bureaus (Experian, Equifax and Transunion). To request your free credit report, visit www.annualcreditreport.com>. (This process can take 30 days or more, however.)
* When pulling your own credit report, you should consider obtaining a report that provides all 3 credit scores, as the lender will use your middle score, which must equal or exceed its minimum credit score requirement. If the borrower obtains only one credit score (typical of free credit reports), it might misrepresent the borrower’s creditworthiness to the lender.
For instance, assume that the lender’s minimum requirement is a 650, and that the borrower’s credit scores might are 639, 655 and 667. If the one score indicated on your (free) credit report happens to be your lowest one (’639′ in this case), the lender might be less inclined to consider your deal seriously.
Conversely, if your scores are 639, 645 and 667, if the one score you obtained was your highest one (’667′ in this case), it might mislead you into pursuing the transaction further - only to be disappointed when the lender pulls a professional, tri-merged credit report showing all 3 credit scores (including your disqualifying middle score of ‘645′, in this case), later in the process.
Tags: 
Loading ...
0 Responses to “Credit Reports”