Typically, hard money loans are thought to be the last resort of the borrower with bad credit. However, private capital loans can be beneficial for borrowers with good credit, too, by providing fast turnaround times and minimal red tape. And private lenders will often offer lower interest rates or better terms to borrowers with higher credit scores (e.g., 640 or higher on a scale of 300 to 850).

So how can you check up on your credit score? There are three agencies that track your credit history and provide reports: Equifax, TransUnion, and Experian. You can request one free report directly from each agency every 12 months. While the free reports won’t include your credit score (just your credit history), they allow you to see if anything is on there that shouldn’t be and can give you an idea of where your credit stands. And many credit cards now will tell you your FICO score without the credit report. Be cautious of websites offering free credit reports as these can often have hidden fees or other strings attached. Keep in mind that creditors don’t necessarily report to all three agencies, though, so it’s best to check reports from all three because one may have information that negatively affects your credit score that isn’t on the other two. It’s also important to keep in mind that lenders can look at the history and scores from any one agency or from all three.

Once you know your score, how can you improve it? The credit agencies collect information about how many credit cards you have, when creditors have requested information about your credit, whether you’ve paid your creditors on time or late, and how many creditors have turned your accounts over to collection agencies. If you have any IRS liens, judgments against you, or bankruptcies on your record, these will also be part of your credit history. All of these factors can influence your credit score for better or for worse. If you have a lower score, fixing it can be a long and slow process, but it is possible and worth it. Three things you can do to start the process are to request a free copy of your credit report and check it over for errors (if you find any, contact the creditor and the credit agency to resolve them), set up payment reminders so that your bills get paid on time, and reduce the amount of debt that you owe (the more available credit that you have that isn’t being used, the higher your score will be).

For more information on the hard money and private capital loan programs we offer and how your credit score might affect your loan request, contact Montegra at 303-377-4181.