If you're considering a hard money loan as a financing option, you may be wondering if hard money lenders run your credit. Hard money loans are a type of alternative financing that is often used by investors to purchase and renovate distressed properties. They are typically faster and more flexible than traditional bank loans, but they also come with higher interest rates and fees.
So, do hard money lenders run your credit? The answer is that it depends on the lender and the specific terms of the loan. Some hard money lenders do run credit checks as part of their loan evaluation process, while others may not.
If a hard money lender does run a credit check, it's likely that they will use a different credit scoring model than what is used by traditional lenders. Hard money lenders may use a modified version of the FICO score or another proprietary scoring system that takes into account factors such as the value of the property being purchased and the borrower's ability to repay the loan.
That being said, credit score is not the only factor that hard money lenders consider when evaluating loan applications. In addition to credit score, hard money lenders may also consider the borrower's financial history, experience, and the value of the property being purchased.
In conclusion, whether or not a hard money lender runs your credit will depend on the lender and the specific terms of the loan. Some hard money lenders may run credit checks as part of their evaluation process, while others may not. It's important to shop around and compare different hard money lenders to find the best terms and rates available.