How Important Is Your Credit Score to Your Hard Money Lender?

Your credit score is one of the most important components within your financial realm. There are classes taught as early as high school that cover your credit score and the steps you need to take to start building credit as soon as possible.

Unfortunately, some people run into situations or make bad decisions when it comes to their finances and their credit score is affected accordingly. This can have major implications both immediately and down the road.

Most banks and financial institutions pull your credit report and are narrowly focused on your credit score, along with a few other factors. When it comes to your hard money lender, however, you’re more than just a number to us.

You’re More Than Just A Number

First and foremost, your credit score still matters to a hard money lender. It will impact whether or not you’re approved, the rates and terms you will receive as well as the number of deals you will receive financing for. As far as the standards when it comes to determining your creditworthiness, however, you could say that hard money lenders are more reasonable than banks in their decision making. In addition to just pulling your credit score, we look at:

  • Your overall credit history. A slight bump in the road isn’t going to automatically disqualify you from being approved. We understand that situations arise and, to put it simply, life happens.
  • Your assets. If an issue were to come up, how prepared are you to handle it? Do you have the money to start the job, and can you afford to make the payments?
  • Your experience and character. What does your history look like within the real estate industry? Successfully completing previous deals isn’t going to show up on your credit report, but we look very favorably upon experienced investors.

If you have less-than-perfect credit…

Just because you have less-than-perfect credit doesn’t mean that you should give up on the real estate industry entirely. Take steps to improve your qualifications and your credit. It can be a long process when it comes to rebuilding credit but it is not impossible. Also, if you have a history of credit problems, be able to explain them. We understand that situations arise and we are more understanding than typical institutions. Finally, be sure to be thorough with your due diligence; if you have a great deal and plan to go with it, you’re more likely to be approved.

Have concerns about your credit history? Catalyst Funding does not have a minimum FICO score requirement and can issue approvals even with a past bankruptcy or foreclosure. The most important thing we consider is the character of the borrower, the project and its potential. Give us a call today at 832.648.3626!




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