As a direct private lender, we extend credit to real estate investors at all experience levels—from newbies to seasoned professionals. Unlike traditional lenders, we lend based on the inherent value of the property itself and not your personal income.
However, although we have no income requirements, we do want to know that our borrowers are in good financial standing. It reduces our risk to lend if we know that you have both the knowledge and resources to complete the investment project successfully. And, it goes without saying, that the better your credit, the better the rate we can offer you.
One of the ways we assess your financial strength is by running a credit report. Please note that we only pull credit once we’ve provided you with a conditional approval of your loan, and you’ve agreed to the rate and terms. We also require a signed borrower’s authorization to run credit so there are no surprises. There is no credit pull when you simply request a quote with us or submit a pre-application on our website.
But what if your credit score is not where you want or need it to be? Below are some suggestions to boost your score and, by so doing, improve the rate and terms we can offer you. Some are basic common sense but others may not have occurred to you…
📌 Pay your bills on time. This is the most important factor in determining your credit score. Make sure you pay all of your bills on time, including your credit card bills, car payments, and mortgage payments.
📌 Keep your credit utilization low. Your credit utilization ratio is the amount of credit you're using divided by the total amount of credit you have available. A good rule of thumb is to keep your credit utilization below 30%.
📌 Length of credit history. The longer your credit history, the better. If you have a short credit history, you can start by opening a credit card and using it responsibly.
📌 Avoid hard inquiries. Hard inquiries are requests for your credit report that are made when you apply for new credit. Too many hard inquiries can hurt your credit score. Again, note that we don’t do a hard pull on your credit until after you’ve agreed to the terms of your conditional approval.
📌 Dispute any errors on your credit report. If you see any errors on your credit report, dispute them immediately. Errors can lower your credit score, so it's important to get them corrected.
📌 If your personal credit is less than stellar or you have limited experience, we are often able to sweeten your terms if you are able to bring more money to closing. By putting more money down and reducing your leverage, you effectively reduce the risk to lend.
It is our goal to not only help you succeed in your next real estate investment project but to, ultimately, turn you into a satisfied, repeat client. Reach out to us today to get pricing on your next fix and flip, rental/DSCR, new construction or bridge project. Call/text us at 888.444.3160 or email firstname.lastname@example.org to be put in touch with your loan officer.