I recently sold a house to a tenant via owner financing. I would like to report the mortgage and timely payments to the credit bureaus to improve her credit score, so she can refinance into a conventional mortgage in the next year or so.
Does anyone know how to do this?
I also want to report judgments I have against former tenants. I want to report the bad and the good, and the only companies I have found so far will only report the bad.
Thanks,
Aaron
You ask a question that is interesting, none of my sellers doing an owner carry have ever made a report to a credit bureau.
I believe that credit bureaus get info about judgments directly from the court systems or via a reporting service that monitors the court systems.
To report information to the credit bureau, you likely need to be a member of the credit bureau. You should contact them directly to find out how to do what you want to do.
I have never heard of another investor doing this either. I am trying something new. It helps the new homeowner (improved credit score and lower payments when refi)and me (when they refi and I cash out).
Aaron
I know there are companies that provide this service. My company is too small to open an account with the credit bureaus.
As far as I know, the credit bureaus do not receive automatic information from the court system. The government does not report judgments. They only report when money is owed to them through non-tax and not-tariff related bills.
There is a lot of information out there, and it is a bit much to sort through.
My experience is that you have to be a RETAIL member of the credit system * BIG 3 * and THAT is VERY EXPENSIVE!!! I doubt this will be beneficial in re-fi as they may well see it like a verification of rent since they have no interest in the property.
Seller should discount the paper if he wants out of the financing arrangement and buyers need to take their own steps to clean up their credit over the life of the owner financing package
The new homeowner has interest in the property, because they have bought the home. I am not sure why a private mortgage would be judged differently than one from a bank.
I know the process of selling a note. Not sure how that is relevant to the topic at hand.
I did not mention cleaning or repairing the homeowner's credit. Not sure how that is relevant either. A reporting mortgage drastically improves a credit score when payments are made on time. If I can do something very simple to drastically help someone improve their life (credit score is the most important number in a person's life), then I am going to do it - the norm be damned.
I am bringing a new approach to real estate world. If I can help one of my tenants purchase a home, turn a profit and not place my business in potential legal trouble, then I will take the action regardless of what the current norm is. I hate the current relationship between investors and tenants/buyers, and I will not let the sad state of affairs impact my world. I will to create a Win-Win situation for everyone involved or I am not doing business.
I found out it is very difficult, if not impossible, for a small investor to report to the credit bureaus, even through a loan service company.
Comments(10)