So frustrating when you can show a bank your assets, your bank accounts and liquidity and they still find a reason to turn you down! My husband is from the UK, (dual citizen) he's got the assets and despite the 720 credit score he's managed to build in the last year, he still can't get a business loan approval. Neither will they permit him to leverage any of his debt free investment properties. The reason they give is "lack of debt history" ! How are we supposed to build a debt history it if no one will grant us a loan? Besides a hard money lender, is there anywhere else we can try?
Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
13y
Annette H. This is true - they want the history. Here is what they are thinking - his capacity to repay is there, but is his willingness? He's got no debt; he seems debt-averse. Why does he want to change now?
Consider getting a couple of credit cards. He will need to establish a willingness to carry debt.
Yes, I agree. He obtained a bank credit card at the start of last year where he had to pay a deposit upfront and then build up a history of payment. He has an Amex card in his name but it's under my account. He's tried to apply to several different ones but been turned down again and again for lack of credit. :/
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
Throw some money in a CD at the bank, then go in later and borrow against the CD, it probably won't cost more than a point or two above the CD. I don't suggest you go buy a car to build credit, unless you really need a car. As Tevis mentioned, you need to establish a lending relationshipwith the bank, use the CD route, then ask for a small unsecured loan, pay it back, then ask for a larger secured loan or mortgage. Good luck :)
Are you also unable to get cash-out refi's or helocs on the debt free properties? Are you trying to secure loans where the only recourse is the investment property being purchased? Have you spoken to any smaller local banks?