A common concern and question we get is whether or not it is possible to get a hard money loan with bad credit or even no credit at all. The answer comes as a surprise to most because loans are almost always mentioned alongside credit and your personal credit score. In most cases, a bad credit score severely hinders your ability to secure a loan, but hard money loans tend to have a different set of rules and guidelines. This is what makes hard money lenders different from traditional banking institutions; or soft money lenders.
Can I get a hard money loan with bad credit (or no credit)?
The answer is yes, you can secure a hard money loan with bad credit or even no credit score at all. It may be even more surprising to know that not all lenders will even run a credit check on you. Any one who has taken out a traditional loan, such as a car loan, may find this hard to believe.
Now, all hard money lenders are different, and all deals are different as well, which means you cannot expect the same process and result for each investment you pursue. Lending is all about risk management so it is the entire makeup of the deal that, in the end, determines if it's a good bet for the company lending the money.
Why doesn't credit score matter?
The primary focus of your hard money loan application is usually the loan-to-value (LTV) ratio. In short, the LTV is the ratio of the amount of your loan compared to the value of the underlying asset which is put up for collateral in case you cannot pay off the loan; in the most cases, this is the property being invested in. Your bad credit score is less of a concern because the lender will foreclose and acquire the property if you are unable to repay the loan. The lower the LTV ratio, the less risk and more potential profit there is for the lender in the event of a foreclosure. This is why if you have bad credit but you have the money to make a significant down-payment, you should not have a problem securing a hard money loan.
How can I find hard money lenders without credit requirements?
Our platform makes it incredibly easy to do this. In fact, you don't have to do any searching of your own. Simply submit your loan requirements and we will automatically match and connect you to lenders that are a fit.
If you do want to do some searching of your own, we made that easy too. In our database of nearly 1,000 hard money lenders, over 600 of them have no credit requirements and are willing to lend to people with bad credit or no credit at all:
