The Credit-Report And Selecting The Right Buyer

How important is it to check your prospective buyer's credit-report?

According to the New York Times, "The credit score has become the single most important indicator used by lender's to predict whether a borrower will repay their loan."

We often see ads of home sellers that offer "Nothing Down", "Low/No Down" and "No Credit Check" terms to buyers! That is certainly OK, if that is what you want.

When it comes to financing, those terms are typically associated with a "poor quality" note. It's both difficult to sell, and normally has very low pay outs.

With "Cash-Now-Seller-Financing", it is in your best interest to create the best quality note you can so you can get the most cash from the sale of your note!

That means you should always:

How Lenders Keep Score

"The only thing constant is change". That is especially true in the area of credit reporting and credit scoring. Following are the newest guidelines for lenders as developed by a new system called "VantageScore".

The system is a collaboration between the three top credit-reporting bureaus, Equifax, TransUnion, and Experian.

These new credit ratings simplify the way lenders assess loan risk on a case-by-case basis. It also helps them determine if they will lend money to a consumer and at what interest rate.

New Credit Scoring Scale

Just a reminder. If you follow these guidelines, it will help you to effectively collect the information on your prospective buyers. We will evaluate, process and package the information for you. You will know which candidate for purchase is your best prospect, and how much we will pay you for your note before the contracts are prepared.

This should simplify the process for you with the buyer selection and the best deal structure alternatives.