Commercial loans represent significant investments for banks and lenders. While loans may range in total amounts and LTV, all of them represent a significant risk because not all commercial properties are profitable. That is why lenders are often unwilling to give any loans to those with an LTV higher then 80% or to borrowers without any personal investment.
Lenders look at multiple different factors before deciding that an investor is worthy of a loan, and one of the most common is personal credit score. While it may seem strange that commercial lending is affected by one’s personal credit score, lenders need to know that you, as an investor, have a history of being low risk and few financial obligations that would prevent you from paying back the loan.
Minimum Credit Score on Experian for a Commercial Loan
It’s recommended that you check your credit score at least once a year, and commercial property investments are one of the primary reasons why. Lenders are simply unwilling to provide funding for borrowers that cannot prove financial responsibility, and many check with credit score companies like Experian before deciding whether to offer the loan.
Keep in mind that credit score is not everything. Other factors that go into lending include:
- Personal Capital
- Amount of the Loan
- LTV
- Type of Loan/Property and More
Credit score is simply one factor of many, and someone with an 800 credit score may not get a loan while someone with a 700 credit score might. It’s not as simple as pointing to credit score alone.
Indeed, many lenders also have different ideas of what is a “good enough” credit score, and some – especially those that offer higher interest loans – are willing to take on more risk if the property is right. However in general, the minimum credit score for a commercial loan is between 600 and 650:
- 750 to 850 – Always high enough.
- 650 to 750 – Likely high enough.
- 600 to 650 – Depends on Lender
- <599 – Danger Zone/Impossible
It’s crucial to keep your credit score high if you plan to apply to these loans, and if you have a low credit score and still want a commercial loan, seek out assistance from someone to help raise your credit score or find an alternative form of payment.
However, if you’re in the right range, then it’s time to get started financing your commercial property. Sign up with CRE Lender today to find out more. We are a team of experts that put people like you in touch with those that can get you the loan you need at the lowest interest possible. No matter your credit score, sign up with CRE Lender to see what’s available and to get started with your lending needs.
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