Why should you have a credit monitoring service?
At some point real estate investors will borrow capital to execute their projects. Whether you use a lender on all your projects or just on occasion it is important for you the investor to borrow money at lowest cost available to maximize your profits.
So how does your credit come into play when determining your borrowing costs?
The obvious reason is the rate.
Lenders set rates based on the risk of lending their money. The lower the credit score the higher the risk and consequently the lender will want to be paid a higher percentage of profits for taking this risk. Of course, the reverse is also true.
Your credit score will also determine how much the lender is willing to give. The higher the credit score the higher a percentage of the total cost. Great credit can sometimes get you 95%-100% financing toward your project.
Since your credit will have an impact toward your profits it suffices to say your credit is important to you the investor.
A good credit monitoring service will allow you to view a full credit report for all 3 bureaus (Experian, Equifax, and Transunion).
In addition, you will need know the scores based on the methods the lenders use. A free service is fine for credit cards and simple loans but not for commercial financing.
By having a solid credit service, you can make sure the information contained in the report is accurate, identify weak areas and have a reasonable expectation of what type of rates and terms you can borrow money at. Which in turns helps you to fine tune your profit margins for a given project.
Possibly the most important reason is to avoid running your credit needlessly. If you have no idea what your credit is then you will make the mistake of applying without knowing what your results will be. Every credit inquiry will lower your score. By law if you pull your own report no credit inquiry will be marked.
As a professional investor you need to be armed with every tool and obtain as much information about your craft so you can maximize your chance at success. Losing deals or getting high-cost financing because you did not pay attention to your credit is avoidable.
I recommend using IDIQ. They are an established credit monitoring service that scores credit based on the FICO system. Most lenders will use the FICO scores. By joining you will have unlimited access to all three scores and reports.
Below is a link for you to get started today. I wish you success in your investment endeavors.