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?
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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.
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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
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.
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
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.
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š° Common Lending Mistakes CRE Investors Make (and How to Avoid Costly Financing Errors) š«
š° Common Lending Mistakes CRE Investors Make (and How to Avoid Costly Financing Errors) š«
š¢ Top Commercial Real Estate Lending Mistakes Investors Make Before Closing ā ļø
Common Lending Mistakes CRE Investors Make
Commercial real estate financing is rarely simpleāand small mistakes at the loan-structuring stage can cost investors hundreds of thousands of dollars over the life of a deal. From choosing the wrong loan product to misunderstanding lender underwriting priorities, these errors often surface late in the process when options are limited.
As a mortgage broker working across banks, agencies, CMBS lenders, and private capital, I see the same lending mistakes repeated again and again. Below are the most common commercial real estate lending mistakesāand how smart investors avoid them.
1. Choosing the Loan Based on Rate Alone
Interest rate is only one component of a commercial loanāand often not the most important.
Common issues include:
Ignoring prepayment penalties (yield maintenance or defeasance)
Overlooking recourse exposure
Selecting short-term debt for long-term assets
Missing flexibility for future refinances or sales
A slightly higher rate with better terms often produces a stronger long-term outcome.
2. Not Matching the Loan Structure to the Business Plan
A value-add deal, stabilized property, and owner-occupied acquisition all require different financing strategies.
Mistakes occur when investors:
Use permanent debt for transitional assets
Use bridge debt without a clear exit
Underestimate seasoning requirements for take-out financing
Your financing should support your timeline, risk tolerance, and exit strategy, not work against it.
3. Underestimating DSCR and Cash Flow Requirements
Many investors focus on purchase price and loan-to-value while overlooking debt service coverage ratio (DSCR).
Lenders care about:
Net operating income sustainability
Stress-tested cash flow
Market vacancy assumptions
Over-leveraging a deal often leads to reduced proceeds, higher pricing, or a declined loan late in underwriting.
4. Poor Financial Documentation Preparation
Incomplete or inconsistent documentation slows deals and weakens borrower credibility.
Common mistakes:
Outdated or mismatched rent rolls and P&Ls
Missing entity documents
Unexplained income or expense anomalies
Weak personal financial statements for guarantors
Well-prepared financials signal professionalism and reduce lender friction.
5. Ignoring Recourse and Guarantee Language
Not all ānon-recourseā loans are truly non-recourse.
Investors are often surprised by:
Bad-boy carveouts
Environmental or fraud triggers
Partial or burn-off recourse structures
Understanding guarantee exposure before signing a term sheet is critical to risk management.
6. Waiting Too Long to Involve a Mortgage Broker
Many investors approach lenders directly without understanding how capital markets price risk.
A mortgage broker:
Shops multiple lenders simultaneously
Structures leverage and terms strategically
Anticipates underwriting objections early
Aligns the loan with future refinancing options
Early involvement creates leverageānot cost.
7. Assuming All Lenders Underwrite the Same Way
Banks, agencies, CMBS lenders, and debt funds each evaluate risk differently.
Differences include:
How income is calculated
Treatment of tenant rollover
Market concentration limits
Appetite for specialized assets
Understanding lender psychology is just as important as understanding the numbers.
Final Takeaway
Commercial real estate lending mistakes are rarely fatalābut they are expensive.
The best investors treat financing as a strategic tool, not a commodity. Proper loan structuring preserves equity, improves returns, and protects flexibility in changing markets.
If you are buying, refinancing, or repositioning a commercial property, the right financing strategy can be the difference between a good deal and a great one.
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Ā© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory
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Refinancing youe loan and when to do it
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Copyright Ā©2021 | Mortgage Viking Team
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 Ā© 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/
Copyright Ā©2021 | Mortgage Viking Team 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
Corporate | NMLS ID NMLS # 1825831
Corporate Address : 2651 N. Green Valley Pkwy STE. 101 Henderson, NV 89014 https://medallionfunds.com/bill-rapp/