Part One of a Four-Part Blog Series
Credit reports are an incredibly valuable tool for lenders when it comes to making financial decisions, so naturally, we receive a lot of questions from our commercial mortgage brokers about credit reports. It should come as no surprise that lenders prefer tri-merge credit reports as opposed to the free credit reports your borrowers can pull themselves. The ability to pull tri-merge credit reports is an investment, but it’s well worth it for your lenders, your borrowers and you. Here’s why it’s a great idea to provide a tri-merge credit report when submitting a commercial mortgage scenario:
It gives us a more accurate picture of your borrower’s situation.
A tri-merge credit report pulls your borrower’s credit from all three major bureaus – Experian, Equifax and Transunion. These bureaus use different formulas to calculate your borrower’s score, so your lender will get a broader picture of your borrower’s credit health when you submit a tri-merge, as well as more accurate scores. These reports also provide trade-lines, which give your lender an idea of the nature of any late payments, tax liens or any other potential issues.
It’s easier to read.
Because tri-merge reports come from the major credit bureaus, they’re organized in such a way that they’re easily read. Free credit reports are generally more difficult to read, which means your lender has to spend more time speaking with you and your borrower to get an accurate idea of your borrower’s credit. Submitting a tri-merge saves you time.
It helps you to better understand and sell the loan.
Because tri-merge credit reports provide so much detail, you have the opportunity to better understand your borrower’s credit history and, consequently, the deal. Getting an idea of your credit scores and past issues they may have encountered will help you to place the loan with the right lender and to sell the deal.
Tri-merge credit reports allow both you and your lender to better understand potential commercial mortgage deals with more accurate scores and detailed trade-lines. If you aren’t able to pull your own tri-merge reports, talk to your lender and send a credit authorization. If you’ve developed a good relationship with the mortgage lender, they may be able to pull the report for you. Your borrower’s credit is an important factor in any deal, which is why submitting a tri-merge credit report is your best bet.