Credit Report

Question…What should one say to a seller who seems to want to sell, but asks for a credit report from the buyer(buyer’s credit isn’t good)?

Unless you are doing somesort of owner finance, L/O, or Sub-2 - ain’t none of his business (he isn’t motivated).

<<Unless you are doing somesort of owner finance, L/O, or Sub-2 - ain’t none of his business (he isn’t motivated).>>

Yes and no…a lot of sellers are looking to be satisfied that you’re going to “make mission” when you contract to buy their house…they are looking for some sort of assurance that, if they contract with you and take their property “off the market” (because it’s ‘under contract’) that you will have the ability to come through. This can be satisified in a number of ways – none of which involve giving anyone a copy of my credit report!


The day I give a copy of my credit report to the SELLER is the day that I fly to the moon!!! Never going to happen. As mentioned, the seller of course is looking for some assurance that you are a committed buyer. But that has nothing to do with your credit report. You could have awful credit because you mismanage your credit card debts, but you are perfect in regards to your mortgage responsibilities. Either way, none of this is the seller’s business. How you manage your debts is your business, so long as it does not have a negative impact upon those who trust you to be a timely, committed buyer. If the seller is looking for this type of info. from the buyer they are not motivated-move on!

This seller says he’s motivated, as he is tired of being a landlord. What exactly do you all say to a seller to lock in the deal, but at the same time let him know that you are not willing to give him your credit report?

How are you proposing to finance the deal?


seller finance…, but I still don’t want to give a fsbo my credit report. I need a way to assure him that I will keep my end of the bargain, or I need to walk away from the deal without him knowing it was because he asked for my credit report. I’m thinking that if he dwells on getting the report, I may tell him something like…

“As I stated in the purchase proposal, my offer would be contingent upon my partner’s approval (I don’t have a partner), and after looking at the numbers…, my partner feels that she’s found a better deal, and we’ll probably go with that one…”

Does that sound okay?

T A, Keith is right.

Your seller is security oriented. You have to make him feel secure before he will do business with you. Asking for your credit report is just his way of moving toward feeling safer about you.

One important job you need to do when meeting with sellers is building their trust in you.
Until they trust you, they won’t do business with you.

I use a “Credibility Kit” which is really nothing more than a three-ring binder filled with letters that people have written to me after we have done business together. They are testimonials from happy customers that are worth pure gold in convincing someone that you are trustworthy. I also have other supporting documents, such as my membership certificates for the Better Business Bureau, the Chamber of Commerce, etc. It also has pictures of properties that I have purchased in the past.
All of this helps to show the seller that I have a good track record of performing.

You can start building one of these kits, too. I have never had a seller ask for my credit report since I started using this credibility builder.

Until you have one, you’ll have to use other ways to gain a seller’s trust that you will perform as agreed. Find out what your seller needs to feel safe about you, other than your credit report.

Maybe you can pre-pay several months payments in advance to show your good faith. This would be preferable to putting more money down, as you are going to have to make the payments anyway.

Maybe you can sign a Quitclaim Deed back to the seller to be held in escrow, with instructions that if you default on your note to the seller, the quitclaim deed shall be recorded. This will save them from going through the hassle of a foreclosure if you turn out to be a flake.

Some of the others can probably suggest some more ideas that can help make your seller feel secure without the credit report.

How about it guys?

PS:  After revisiting this thread, it occurs to me that I totally overlooked something obvious in my post above.  In almost all cases now, we are contracting to purchase properties in the name of an LLC or our corporate entities.  A seller might think about checking out the credit of the corporation, but the entity approach might preclude them from asking for our personal credit.  We are perceived as just an employee of the business, I guess.  There is no deception here - it just never comes up.

When we structure owner carryback financing, the sellers are usually not professional investors.  They are worried about getting paid on time, and not having to go through a foreclosure in the event of non-payment.  This is a very real fear for them, so we take the necessary steps to eliminate this fear and make them secure.

what’s your motivation behind lying about why you’re backing out of the deal? I don’t understand how it affects you in any way to tell the seller that his request for a credit report can be a deal killer. Are you planning on trying to make friends with the guy afterwards? If it’s just pride, get over it and tell the seller you have shaky credit but you can structure the deal to offer him security. If it’s a deal worth doing, don’t walk away from it b/c you don’t want to admit to bad credit, find a way to make it work on both ends. I will run a credit and criminal history report on anyone I L/O or owner finance a property to, and so will any lender in the world. This is not a handshake and smile financial society we live in.

The motivation behind lying (so you say) about why I’m backing out of the deal is that my ‘shaky’ credit is none of this seller’s business. All the seller needs to know is that I will do what I said I would do in regards to the deal (thanks for the ideas Valgolas). Call it lying if you want to… The truth is I am my own partner, and if I were to back out of this deal, I would go find another deal, with more profitable numbers, and go with that one instead… without a credit report.

you were asked how you were going to finance the deal and responded “seller finance, but I still don’t want to give the seller my credit report”. Anyone who seller finances is going to want to know that you are trustworthy, not necessarily that you have perfect credit. If you have never paid for anything you have financed in your life, why would a seller want to volunteer to be next in line?

“Call it lying if I want”? You ran through the story you plan on telling if the seller continues to want to see your credit - i.e.-lying instead of facing your credit head on and dealing w/ it. It’s okay to have bad credit, you just need to deal w/ it. I’ve never rented or L/O’d to anyone w/ stellar credit, if they had great credit, they’d buy instead. At the same time, I’d never rent to someone who I could tell was not being honest w/ me either - who knows what else they’re hiding.

Finally, you say you are “backing out” to find a “more profitable deal w/ better numbers, where a credit report is not needed”. Credit report or not, if there is a better deal out there, go get it. Why opt to do the deal that you don’t like the numbers on it anyway?

I wish you the best of luck. There are plenty of deals out there you can make w/ poor credit. Work to rebuild your credit, be honest and sincere w/ people, and you may be surprised how many people will still be thrilled to have a buyer regardless of whether you have some credit issues.

Thank you…Keith, Milo0129, and especially Valgolas for your responses to my question.

You’re more than welcome! :wink:

When they are asking questions like this, you’ve lost control. Your job is to identify THEIR pain and make them bleed all over their neutral colored carpeting.

They shouldn’t be focused on you.

Go negative if you get in this situation.


Great point, Mike!

Some of the others mentioned this too. The sellers we should be talking to are the ones in distress. If their ownership problems are big enough, they won’t be too concerned about you credit. They just want a solution to their problem now.

When you say “go negative”, I assume you are talking about the “Take-Away Close”?

You can go negative at any time. I was trained in the Sandler Sales system. If someone is just sitting there indecisive, you have to do something to get them moving. And it isn’t begging them to sell you their house.

Valgolas: was so distracted by your animated graphic that I thought your sentence was “take away clothes.” Really woke me up this am.



I see what you mean, Richard! (That’s not me pictured, by the way.)

I’ve got a couple of teenagers in the house - each with a sense of humor. They seem to know all my passwords somehow, and the minute my back is turned…well, you can see the results to the left.

She certainly seems to enjoy coin-pony horseback riding!