What’s wrong with what I am doing. I have been getting leads and deals coming to me but I can not get any funding for my deals to save my life. I opened my first credit card in July to build my credit. I made and paid off my debts each month. I gained a 700 score but went to Wells Fargo to apply for a 10,000 unsecured loan. I just found out that I was denied. What is wrong and why can I not find any funding to get my business going. Can someone please help me.
Needing two year credit history by almost all lenders.
So how does one start their business in real estate investing. Is there a workaround for this?
As Sam mentioned, the length of your credit history is a determining factor in underwriting. When you say 'you opened your first credit card' is this also your first 'account'? Have you ever taken on installment debt in the past (Student Loans, Auto Loans, ect.)? If you JUST opened your first account it will be challenging to go the conventional route, but depending on what else you have to bring to the table you may be able to find a secondary lender, private lender, hard-money lender...
Cash/Credit/Collateral/Experience - I'm going to assume that 'Credit' is out for this
â¢ Cash (Liquidity) - How much do you have to put into the deal, and how much liquid reserves do you have (Checking Accounts, Savings Accounts, IRA/401k, Life Insurance Cash Value,
• Collateral - Other than the investment property you are trying to finance, do you have other assets that a lender may see value in, such as equity in a personal residence?
• Experience - If you're trying to get your first deal financed it can be very rough, but if you have other investing experience (Wholesaling, partner on another deal) it can help.
A 700 score might sound great, but in reality your credit score in and of itself it rather worthless. Here are some factors that lenders consider when evaluating you as a borrower
• Payment history: -- Your account payment information, including any delinquencies and public records.
• Amounts owed:-- How much you owe on your accounts. The amount of available credit you're using on revolving accounts is heavily weighted.
• Length of credit history: -- How long ago you opened accounts and time since account activity.
• Types of credit used: -- The mix of accounts you have, such as revolving and installment.
• New credit:-- Your pursuit of new credit, including credit inquiries and number of recently opened accounts.
There are plenty of great resources on this site to do your own due diligence. I'm more than confident that I can answer any question you have regarding personal credit as I look at thousands of reports every year, so I'm happy to make myself available to chat if you need to.
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