How does a finance company tell if a previous loan has been paid out?
thanks
Answers:
I worked in banking and finance for 15 years and yes they can tell if you have a paid out loan & they can tell if you have other loans currently open. However, they can only tell this by pulling your credit report and the financial institution you have the loan with must be reporting your statistics to the credit bureau.
In this day and time I know of very few financial institutions that do not report to a credit bureau. The credit report you get as a consumer is not the same exact report a financial institution gets on you. The financial instittution will usually see more info. It should be close, but the credit bureau may not list out all your old closed accounts on reports requested by the customer since most people are only concerned about any open ones.
Chances are that forgetting your small loan will have little to no affect on your credit application. Most people forget something on their application, it is normal. The only way it would is if the loan amount still open drastically changes your monthly debt load and if it is severly past due now or has been in the past. From the sound of your question neither example applies to you so you should be ok.
What has probably happened is the lender that you have the small loan through does not report to the credit bureaus...some very small lenders don't report at all. That is why it is not showing up on your credit report.
The other reason it may not show up is if the loan is new...if it is over three months old, then chances are, it will never show up on your credit report.
I would disclose it...technically, you can say nothing, but they can't make a decision if you really can afford the car or not if you don't disclose all of your debts. It's in your best interests to disclose it.
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