When you’re sifting through different ways to finance your latest endeavors, you may find yourself asking whether hard money loans appear on your credit report. It’s a fair inquiry, especially if you’re in real estate investment. Let us help you land on some definitive answers to that question and to a couple more FAQ about this aspect of your financial history.
Will Hard Money Lenders Report My Loan to Credit Agencies?
Whether or not hard money lenders will report your loan to credit bureaus largely depends on your lender. Most people pursue hard money loans because they have much more lenient credit criteria and, as a result, higher approval odds. So in many instances, it makes more sense for a lender not to report your loan to credit agencies. This is especially true when you consider that lenders must go through the process of finding a credit reporting service, opening an account with each primary agency, collecting all your payment information, and inputting your history.
However, it’s worth remembering that hard money lenders can and will do this if they feel it’s necessary to protect themselves and their investments. So it’s always best to conduct yourself as if your loan will show up on your credit report and to adhere to your payment plan.
Where Else Might My Hard Money Loan Show Up?
Your hard money loan may not always show up on your credit report, but they’ll undoubtedly show up in other places. For instance, suppose you received a hard money loan for your very first home but you’re currently interested in getting financial backing for your investment properties. Well, when you start the application process, your lender might conduct a background check or asset search and find that you still owe a large sum of money on your last loan. They might also glean that you have a spotty history with on-time payments. These factors could keep the lender from approving your application.
The point is, your hard money loan may not be visible on your credit report, but they will show up in other places. So your record must reflect responsibility and commitment to paying back what you owe, especially if you’re considering applying for more loans in the future.
Why Is It Important To Be Transparent About Hard Money Loans?
Being transparent about your hard money loan is crucial because it gives interested parties a candid and detailed picture of each investment aspect. Even if you don’t have a sparkling financial record, presenting yourself as a transparent, trustworthy person with a growth mindset is far more appealing to hard money lenders than a person who is being dishonest about their past hiccups. Just as well, omitting important details about your loan history might prevent your lender from accurately determining your eligibility for a loan.
Hopefully, this quick guide has provided you with a detailed answer to the question, “Do hard money loans appear on your credit report?”. And remember, when the time comes to apply for a new loan, LJC Financial can answer all your questions and set you up with the best hard money lenders in Austin, TX.