A Consumer Reporting Agency (CRA), also known as a Credit Rating Service, collects, maintains, and provides consumer credit information to third parties to assist in evaluating creditworthiness.
A Credit Rating (Report) is an evaluation of an individual's or business's capacity and history of debt repayment. It provides creditors with an understanding of a borrower's reliability, aiding in the decision-making process for loans and credit.
A Credit Rating Service or Credit Bureau is an organization that provides information regarding the creditworthiness of a prospective borrower. These agencies, also called consumer reporting agencies (CRAs), are essential for lenders to assess the risk of lending to individuals and businesses.
A Credit Tenant is a commercial tenant that is large, financially stable, and well-rated by credit agencies, which can influence favorable terms for mortgage financing based on the tenant's creditworthiness.
The Fair Credit Reporting Act (FCRA) is a federal law that promotes the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. The Act allows individuals to examine, correct, and challenge the information reported by these agencies.
FICO scores measure borrower credit risk and are commonly used by mortgage underwriters when originating loans on owner-occupied homes. The score is based on the applicant’s credit history and credit usage patterns, expressed as a number between 300 and 850. This score determines loan approval and terms offered.
A loan application is a necessary document required by a lender before issuing a loan commitment. It includes key details such as the borrower's personal information, loan amount and terms, property description, and financial and employment data.
A nominee loan is a fraudulent loan obtained by concealing the real borrower's identity and substituting it with another person's name and credit rating.
An OPCO/PROPCO Deal is a financial arrangement where a parent company creates a subsidiary property company to manage real estate assets. This deal structure allows the operating company to reduce debt exposure, improve credit ratings, and potentially avoid double taxation when the property company is set up as a REIT.
A prime tenant in real estate is the tenant who occupies the most space within a shopping center or office building. These tenants are considered creditworthy and are essential in attracting additional customers or traffic.
A Triple-A (AAA) Tenant is a tenant with an excellent credit rating, typically characterized by a minimal likelihood of defaulting on lease obligations.
