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:
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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2 Represents a net estimated, unrealized annualized internal rate of return (IRR) of your portfolio and is based by reference to the effective distribution dates and amounts to and from the investments, as well as any outstanding principal and accrued and unpaid interest as of the current date, after deduction of management fees and all other expenses charged to the investments.[read more]
3 "Annual interest" represents an annual target rate of interest and "term" represents the estimated term of the investment. Such target returns and estimated term are projections of the returns or term and may ultimately not be achieved. Actual returns and term may be materially different from such projections. These targeted returns and estimated term are based on the underlying agreement between the SPV and borrower or originator, as applicable.
4 Reflects the initial quarterly distribution declared by the board of directors on February 6, 2020, which will be payable to stockholders of record as of June 10, 2020, and the initial offering price of $10 per share.
5 The Fund will cease investing and seek to liquidate the Fund's remaining portfolio no later than 48 months after the Fund's initial closing. It may take up to twelve months thereafter to fully monetize any remaining illiquid investments in the Fund's portfolio.
6 Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.
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