Hard Money and Private Lenders Running Your Credit

2 Replies

I have spoken with more than several HML's and each companies website says no credit checks but after hundreds (exaggerating) of discussions with each co's agents they all wanted and more specifically needed to run my credit. Where is the asset based lending? Does lending on the asset need a personal guarantor? So in short to compare lenders i must have my credit run 4,5,or even 6 times? (also, i have all my updated scores from all three bureaus from a well reputable company to pass along instead of getting my credit run again, but the agents ALL say they need to run it thru there company.)

First off, they shouldn't say no credit checks if they're going to check credit; that's just wrong.

The majority of lenders will run your credit because it is the best indicator of what kind of borrower you will be. Asset-based lenders are still lenders, and lenders care about your ability (history) of repayment. Investors that have a good deal, say maybe the total costs of the project is 50% of the ARV, seem to think that's enough for a lender because if anything goes wrong, they can just take over the property and "make more money" that way. However, you have to realize that lenders are in the business of lending, not selling houses or managing contractors. Anything that takes them away from their norm just causes headaches, inefficiencies, etc.

You shouldn't need to get your credit pulled to compare lenders.  They should be able to give you some kind of terms based on information you give them.  Or you can just go with a broker like Tarik mentioned who will do the shopping around for you and then narrow it down to one lender that you should get your credit pulled from.