DVC loan invisible on credit reports?

[katybug34]

This comment was made in a previous thread? Is this true, and if so why would this be the case?

 

[cmanuli]

I am not sure the reasoning, but it does not show up on your credit report, unless you make yourself delinquent and then they report you for not paying.

 

[Mom2OakandEm]

I think the reason I was given was because if you finance through Disney they do in house financing so they don't report it unless it's delinquent.

 

[hellerjw]

We had a DVC loan for 3 years and it never appeared on any credit reports.

As mentioned I think it has to do with the fact that Disney does their own in-house financing and can be very lenient with their reporting, credit requirements, etc. As long as you pay on time they really have no reason to report it to anyone else.

 

[disneynutz]

Companies aren't required to report to credit bureaus and for reasons only Disney knows they choose not to.

It may have something to do with Disney's policy of not publishing or sharing information related to their businesses. The only numbers reported are those required by the SEC.

Bill

 

[ssawka]

I think the reason is that Disney is "lending" the $, but in essence they are not really "lending" $. They are selling you an interest in something that they already own, therefore there is actually no $ changing hands. This is not to say that there is not a cost to Disney. There is an opportunity cost in the sense that they cannot sell your points to someone else while you are using them, so if you were to default Disney will have lost the ability to sell your points earlier, but in reality Disney has not had to put up cash. Also, the risk to Disney is very low, because if you default the your points just go into available inventory that Disney can then sell to someone else, and they do keep whatever you've paid up to that point.

 

[Crystal_27]

While I'm not sure this is always wise (just because it is such a large purchase and probably should show up so people don't overextend themselves), it is indeed the case that the loan does not show up on your credit report. The only thing that shows up is the initial credit inquiry when they check your score.

 

[crazybones27]

You are correct it does not show up on your credit report. I will add though what does show up is the fact that they ran your credit report, but your loan most definitely does not. I know for an absolute fact since I just purchased a home a few months ago and this did not affect us at all.

 

[woohooo]

My guide told me that it was because it's cheaper for disney if they don't report it to the credit bureaus. But I didn't think reporting to the bureaus cost anything?

 

[Sanchez]

Just a word of caution. Though the loan may not appear on your credit report you are still responsible for listing the debt on a mortgage application (or any application for credit in which you must list your outstanding debts.) By not listing this information you open yourself to allegations of loan fraud.

The lending market today is more difficult than ever and as a result much more thorough. Anyone who has applied for a mortgage in the last 1.5 years is likely to agree. While I have not seen this exact scenario arise I have seen lenders refuse to convert construction loans to permanent loans due to negative credit reports during the construction phase. If you are late on a payment or your lender finds out about the debt it could lead to a difficult situation.