Investor Questions: Why do you need my credit report?

When reporting based on net worth, investors are asked to submit a credit report to verify their liabilities as part of their accreditation verification. We pulled together some common questions from our investors to provide some basic information about credit reports.

What is a credit report?

A credit report is a detailed statement with information about your financial health which includes your credit activity, payment history, and status of your liabilities or credit accounts. The report is generated from financial data submitted by credit reporting agencies (Equifax, Experian, or TransUnion). Companies that you do business with send your information to one of the three reporting agencies, which, in turn, compile the information on your credit report. The data used in the credit report can include personal details as well as financial health metrics like the timeliness of credit payments. Generally, the credit report will include your credit history, including a detailed summary of your credit accounts – including balances and credit limits – and their health.

Why is a credit report necessary for verifying my net worth?

Yieldstreet offers investments pursuant to 506(c) of Regulation D, and as required by those regulations, Yieldstreet takes reasonable steps to verify each investor’s accreditation status. When verifying based on net worth, all investors are required to submit both asset and liability documentation. A credit report provides an accurate portrayal of an investor’s liabilities that will be taken into account when calculating an investor’s total net worth.

While a credit card statement can provide some of the information included in a credit report, it does not always provide a complete picture of all liabilities. A credit report will include all of an investor’s liabilities and can be used to more accurately determine their net worth.

The information from your credit report is ultimately used to determine your credit score, which is a grade of your financial health. While this number is often used to make important financial decisions, it does not provide a complete picture of your finances. For the purposes of verifying your net worth, a summary of your liabilities is necessary.

What’s included in the credit report?

Your credit report will include the following:

  1. Your identifying information – your name, address, and social security number, as well as the date of birth and employment information. This data is obtained from information that you provide to lenders.
  2. Your credit accounts – The report will include a list of your credit accounts (credit cards, auto loans, mortgage, etc.), the account balance for each, and your payment history.
  3. Credit Inquiries – A list of voluntary and involuntary inquiries for your credit report made in the last two years.
  4. Public Record – Any public record information like overdue debt, bankruptcies, foreclosures, or liens.

Who will see my credit report?

The investment team at Yieldstreet will review a copy of your credit report to determine whether you qualify based on net worth. The team will only need to review a full summary of your liabilities, so most of the personal information — except your Full Name and Date of the Report — can be redacted from the report that is submitted as part of your net worth documentation. Yieldstreet does not share your personal information with any third parties.

Where can I get a credit report?

You are entitled to a free credit report every month from one of the three major credit reporting agencies – Equifax, Experian, or TransUnion.

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