alarmguy said:
Why do they have to know assets as long as you pay your bills on time?
Since ability to pay should be a factor if you are a good credit risk.
Maybe this will explain my post better (I've been trying to keep my posts shorter *LOL*)
The ability to pay is in your credit score. A good score no matter what income, assets ect means you will move heaven and earth to pay your bills on time no matter what means you use.
If we take into account assets that doesnt mean much and here is why. Just because you have assets doesnt mean you will pay and if they have to ever go after those assets it would/could cost more legally and administratively than the debt itself. Here is an example banks HATE to foreclose on homes, it could cost them tens of thousands of dollars to get you out of your house, they much rather work with you.
Ok, back to assets. Another problem is it would take weeks to get a loan if assets were to be taken into account, the problem with assets just because one is putting them on an application, the bank would then have to make sure you are the legal owner of that property, "title search" once that is done, the bank would have to know if there are loans on the property, expenses, income, taxes, insurance. Every aspect has to be proven.
If someone has assets they may just as well take out a HELOC Home equity loan on the property. Credit reporting agencies could not possibly check the assets of every American in the USA and once they did they would have to then check "if there are loans on the property, expenses, income, taxes, insurance" every single detail which would be impossible to interview every American in the USA and then confirm what they are saying.
If this helps here is a personal example, BTW I dont want to come off as a know it all, my post is only because I experience what I typed above. My wife and I about to take our a small mortgage on a home we are building, 800 + credit scores but even then, its a PITA because I own a commercial asset free and clear, rental income with no expenses to me known as a "triple net lease" to the tenants. I dont even want to put the income from that asset on the mortgage application because the additional income is not needed, but the banks insist on it and of course its going to be on your tax return.
I then have to PROVE that I own the asset, PROVE it is paid for, Prove its insured, Prove there are no expenses "triple net lease" Prove property taxes, the list goes on, the reason explained is, even if all is true, that asset could become a liability if I cant pay the expenses on the asset and possibly lead to a default on the small mortgage that I am trying to take out. So in reality the bank is technically more at risk than someone who doesnt have something like I own even though I didnt want to nor need to list it as income.
It's an interesting subject and I only learned this myself over decades of dealing with my asset which is kind of substantial in my life but by no means more then many other peoples assets in this forum.
