Hard money lenders are individuals or organizations that provide financing to borrowers who may not qualify for traditional financing from banks or other financial institutions. These lenders typically lend based on the value of the property being used as collateral, rather than on the borrower's creditworthiness. As a result, hard money lenders may not use a FICO score to determine the borrower's creditworthiness.
FICO scores are credit scores used by most lenders to assess the creditworthiness of a borrower. These scores are based on information in a borrower's credit report, including payment history, outstanding balances, and the types of credit being used.
While hard money lenders may not use a FICO score to determine a borrower's creditworthiness, they may still consider the borrower's credit history and financial situation when evaluating a loan application. Hard money lenders may review a borrower's credit report and may consider factors such as the borrower's debt-to-income ratio and the borrower's ability to repay the loan.
It's important to note that hard money loans can be more expensive than traditional financing options and may not be suitable for everyone. It's always a good idea to carefully consider your options and weigh the pros and cons before committing to a hard money loan.