Tips on How to Improve Your Credit Score

Hey folks, it's time to get real about your credit score. If you're anything like me, you probably don't pay much attention to it until it's time to apply for a loan or credit card. But did you know that your credit score can make or break your ability to obtain a mortgage loan?

When you apply for a mortgage loan, lenders take a close look at your credit score and credit history. They want to know if you're a responsible borrower who will pay back the loan on time and in full. A good credit score can help you qualify for a mortgage loan with a lower interest rate and better terms, while a poor credit score can make it more difficult to get approved and result in higher interest rates and less favorable terms.

In short, your credit score is one of the most important factors that lenders consider when deciding whether to approve you for a mortgage loan. By taking steps to improve your credit score, you can increase your chances of getting approved for a loan with better terms and save yourself thousands of dollars in the process.

1. Check your credit report regularly

This is a no-brainer, but it's worth repeating. Make sure to check your credit report for any errors or fraudulent activity. You can get a free credit report from each of the three major credit bureaus every year, so take advantage of it.

2. Pay your bills on time

This one seems obvious, but it's worth emphasizing. Late payments can have a big impact on your credit score, so set up automatic payments or reminders to make sure you're always on time.

3. Lower your credit utilization ratio

Your credit utilization ratio is the amount of credit you're using compared to your credit limit. Aim to keep your utilization ratio under 30% to improve your score.

1. Check your credit report regularly

2. Pay your bills

on time

This one seems obvious, but it's worth emphasizing. Late payments can have a big impact on your credit score, so set up automatic payments or reminders to make sure you're always on time.

3. Lower your credit utilization ratio

Your credit utilization ratio is the amount of credit you're using compared to your credit limit. Aim to keep your utilization ratio under 30% to improve your score.

4. Increase your credit limit

If you're struggling to keep your credit utilization ratio low, consider asking for a credit limit increase. Just make sure not to use the extra credit as an excuse to spend more.

5. Diversify your credit

Having a mix of credit types (like a credit card, auto loan, and mortgage) can improve your credit score. But don't open new accounts just to add diversity - only take on credit that you actually need and can handle responsibly.

4. Increase your

credit limit

If you're struggling to keep your credit utilization ratio low, consider asking for a credit limit increase. Just make sure not to use the extra credit as an excuse to spend more.

5. Diversify your credit

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💰 Cap Rate vs. Cash Flow: What Smart Investors (and Lenders) Really Analyze 📊🔥

🔎 Why Cap Rate Doesn’t Tell the Whole Story in Commercial Real Estate 📉🏢

Bill Rapp, Commercial Mortgage Broker

February 26, 2026•3 min read

🔎 Why Cap Rate Doesn’t Tell the Whole Story in Commercial Real Estate 📉🏢

💰 Cap Rate vs. Cash Flow: What Smart Investors (and Lenders) Really Analyze 📊🔥

Why Cap Rate Doesn’t Tell the Whole Story

If you're investing in commercial real estate in Houston, Katy, or anywhere in Texas, you've heard it:

“What’s the cap rate?”

Cap rate is important.
But it’s incomplete.

As a commercial mortgage broker with Medallion Funds, I can tell you directly:

Lenders don’t finance cap rates. They finance risk, structure, and cash flow durability.

Let’s break this down properly.

What Is a Cap Rate?

Cap Rate (Capitalization Rate) =
Net Operating Income (NOI) ÷ Purchase Price

It measures unlevered yield — meaning it ignores debt.

Example:

·NOI: $500,000

·Purchase Price: $10,000,000

·Cap Rate: 5%

That’s fine as a pricing metric.

But here’s the problem…

1️⃣ Cap Rate Ignores Financing Structure

Cap rate assumes you paid cash.

Most investors don’t.

The difference between:

·65% LTV at 6.75%

·75% LTV at 8.25% bridge

·80% LTV with interest-only

·SBA 7(a) vs. conventional

·Bank vs. debt fund

…can completely change:

·Cash-on-cash return

·DSCR

·Exit flexibility

·Risk profile

At Medallion Funds, we routinely see:

👉 A 6.5% cap deal outperform a 7.25% cap deal
Because the capital stack was structured correctly.

Structure beats sticker cap rate.

2️⃣ Cap Rate Doesn’t Show Risk

A 7.5% cap rate might look attractive.

But ask:

·What’s the tenant credit quality?

·Lease term remaining?

·Are rents above market?

·Is there rollover risk in 18 months?

·Deferred maintenance?

·Balloon maturity timing?

Lenders analyze:

·Debt yield

·Lease maturity schedule

·Guarantor liquidity

·Exit cap assumptions

Cap rate alone does not measure durability.

3️⃣ Cap Rate Doesn’t Reflect Growth

Two identical cap rates.

Very different futures.

Example:

Property A:

·Static rents

·Tertiary market

·Limited population growth

Property B:

·Houston MSA growth corridor

·New residential rooftops

·Retail pad absorption

·Medical expansion nearby

Same cap rate.
Completely different appreciation curve.

Markets like Katy, Fulshear, and West Houston behave differently than flat-growth metros.

4️⃣ Cap Rate Doesn’t Account for Leverage Strategy

In commercial mortgage underwriting, we care about:

·DSCR

·Debt yield

·Interest coverage

·Refinance risk

·Prepayment structure

A deal with:

·1.50x DSCR

·Strong debt yield

·Corporate tenant

Will finance more efficiently than a higher cap rate with:

·1.15x DSCR

·Weak tenant mix

·Short lease terms

That directly impacts IRR.

5️⃣ Cap Rate Doesn’t Predict Exit

Exit cap expansion is real.

If you buy at:

·6.0% cap
But exit at

·7.25% cap

Valuation compression can erase years of cash flow.

Sophisticated investors model:

·Stabilized refinance

·Cap rate sensitivity

·Interest rate cycle

·Debt maturity wave

That’s the lens lenders use in 2026.

What Lenders Actually Look At

When we structure loans at Medallion Funds, we analyze:

✔ Debt Yield
✔ Global Cash Flow
✔ Lease Term & Credit
✔ Liquidity & Net Worth
✔ Exit Strategy
✔ Market Depth

Cap rate is just one input.

The Bottom Line

Cap rate is a pricing metric.

It is not:

·A risk metric

·A financing metric

·A growth metric

·A strategy metric

Smart investors ask:

“How does this deal perform under stress?”

If you want to structure a commercial mortgage properly — or evaluate a deal beyond cap rate — that’s exactly what we do.

📞 Let’s analyze the structure, not just the headline yield.

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Commercial real estate investingCap Rate explainedDebt yield in commercial real estateDSCR commercial loanCommercial mortgage broker Houstoncapital stack structureCommercial loan underwritingCash-on-Cash ReturnTexas commercial real estate marketcommercial refinance strategy

Bill Rapp - Commercial & Residential Mortgage Broker

Whether you're a first-time homebuyer, a seasoned investor, or a business owner with ambitious plans, securing the right financing is crucial. At Medallion Funds, we take the guesswork out of mortgages, offering a comprehensive suite of residential and commercial loan options to fit your unique needs. Looking for Your Dream Home? We understand the excitement and challenges of navigating the residential real estate market. Our experienced mortgage brokers will guide you through every step, from pre-qualification to closing. We offer a variety of loan programs to suit your financial situation, including: • Fixed-rate mortgages: Offering stability with predictable monthly payments. • Adjustable-rate mortgages (ARMs): Providing competitive rates for a set period. • FHA loans: Making homeownership accessible with lower down payments. • VA loans: Rewarding veterans with attractive rates and flexible terms. Investing in Your Business Future? Growth often requires capital, and we can help you unlock the potential of your commercial property. Our brokers specialize in a wide range of commercial loan options, including: • Purchase loans: Financing the acquisition of new buildings or land. • Construction loans: Facilitating the development of your project. • Refinance loans: Restructuring your existing mortgage for better terms. • SBA loans: Providing access to government-backed financing for qualified businesses. The Medallion Funds Difference: We go beyond simply finding a loan. We take the time to understand your goals and develop a personalized strategy. Here's what sets us apart: • Expertise: Our brokers have a deep understanding of both residential and commercial lending. • Competitive Rates: We leverage our strong lender relationships to secure the best possible terms. • Streamlined Process: We handle the paperwork, keeping you informed every step of the way. • Exceptional Service: We're committed to providing you with a positive and stress-free experience. Ready to Take the First Step? Contact Medallion Funds today for a free consultation. Let's discuss your financing needs and help you achieve your dreams!

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Refinancing youe loan and when to do it

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🛠️ Renovation ROI Calculator 💰

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Licensed to Do Business | NMLS # 228246

This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Copyright © 2021 | Medallion Funds

Corporate | NMLS ID NMLS # 1825831

Corporate Address : 2651 N. Green Valley Pkwy STE. 101 Henderson, NV 89014

Corporate NMLS NMLS # 1825831 | Company Website: https://medallionfunds.com/bill-rapp/

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Corporate | NMLS ID NMLS # 1825831

Corporate Address : 2651 N. Green Valley Pkwy STE. 101 Henderson, NV 89014 https://medallionfunds.com/bill-rapp/

NMLS Consumer Access Portal

281-222-0433

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Tips on How to Improve Your Credit Score

1. Check your credit report regularly

2. Pay your bills on time

3. Lower your credit utilization ratio

1. Check your credit report regularly

2. Pay your bills

on time

3. Lower your credit utilization ratio

4. Increase your credit limit

5. Diversify your credit

4. Increase your

credit limit

5. Diversify your credit

Blogs

The Top 5 Mortgage Mistakes to Avoid

Mortgage Do and

Do not list