Hi, was wondering if anyone would be so kind as to provide insight to the following;. When obtaining financing through an LLC or corporation does the lender use the LLC and corporation credit report and credit score/FICO? Or does lender use personal credit score or the LLC president credit? Is there a way to legally have lender use LLC or corporation which is a legal business instead of personal credit history when financing investment property? I am not requesting a loan from lender of any sort regarding my questions on this forum, I am just looking for knowledge and insight. Thank you...
@Mike C. I'm just a year into rehabbing in my spare time, so I will state loudly that I'm not an expert. But I'll share what I've done if it can help.
When I first set up my business account with my bank, they had me complete a personal financial statement and they pulled my credit report (they've only ever pulled my credit report this one time). That was to make sure they wanted to do business with me.
The first few homes I bought in my name so I could build a track record with the bank. Those loans relied on my credit report and were reflected on my credit history. Now I buy solely through the LLC. I still have to co-sign the loans (so I'm still personally liable for them), but the loans don't reflect on my credit.
My next step is to visit with the bank about not having me co-sign the loans. Or some other option. Honestly I haven't had time to think much about that yet.
Anyway, there's one perspective. Good luck.
Not until the entity has established a good track record, and perhaps not then.
As others have mentioned, only after you establish a track record with the LLC. But even then, the loan will likely be full recourse. Meaning you are still personally responsible if the loan defaults and that default/foreclosure will show up on your credit report.
Thanks for the expertise. Very informative.