Commercial Mortgage Credit Score Q & A

By: Salomon Wancier

Your creditworthiness is the first thing lenders review to predict your repayment reliability when you apply for a commercial mortgage loan. But do you know exactly what lenders look for? Or what you can do to keep your commercial mortgage credit score high?

Commercial Mortgage Credit Score

Have questions regarding your credit score and its effect on your commercial loan finance request? You’re not alone. Read on to get a crash course on credit as it relates to your ability to get the loan you need.

Q: Why are my credit report and credit score important?

A: Your credit report shows your entire credit history, which helps lenders decide if you’re a good prospect for a loan. Your credit score, based on your credit report, is a numerical evaluation of you as a potential borrower. The higher your score, the more likely you are to repay loans on time. With a high credit score, you get better rates and terms.

Q: Who generates credit reports and scores?

A: Reports are compiled by three different national credit bureaus: Equifax, Experian, and TransUnion. The most widely used credit score is the FICO score, developed by Fair Isaac Corporation. A Tri-Merge report, which includes scores from all three credit bureaus, also includes your FICO.

Q: How can I obtain my credit report and credit score?

A: You’re entitled to a free credit report from each of the three credit bureaus once per year. You can also purchase a credit report from a number of sources online.

Q: What type of information is in my credit report?

A: Everything about your credit history, good and bad, is in your credit report. It lists all of the credit accounts you’ve had – credit cards, loans, mortgages – and the payment histories for those accounts. Any tax liens, bankruptcies, foreclosures, or accounts turned over for collection are included. The report also lists inquiries made by potential lenders/creditors.

Q: Why are my scores from each of the credit bureaus different?

A: There are four main reasons:

  1. Each credit bureau uses its own method to calculate credit scores.
  2. Each bureau may have different data on you, because some lenders/creditors don’t report to all three bureaus.
  3. Credit bureaus can create scores weighted for specific industries: mortgage, insurance, auto, and revolving credit, for example. The majority of these scores are sold to businesses and are not available directly to the consumer.
  4. Scores can change easily.

Q: Besides credit scores, what other factors would a lender consider?

A: Since credit scoring is not a perfect science, it is best to work with a lender who will consider other risk factors. These may include:

  1. Liquidity – The dollar amount of borrower assets that are easily convertible to cash.
  2. Business experience – The length of time the borrower has been in business.
  3. Real estate investment experience – A borrower with a successful track record investing in real estate is more attractive to a lender than someone who has no investment experience at all.

Q: If each credit bureau gives me a different score, which do lenders use?

A: Lenders typically take the middle of the three scores, or the lower of two if a third score is unavailable.

Q: Should I order my credit report and give it to lenders when I apply for a loan?

A: No. You can order your credit report so you know generally what your score is, but your lender will obtain your score directly when evaluating your application. This is especially true if the lender wants an industry-specific score, since those are not available to you.

Q: What factors affect my score the most?

A: The following factors have a significant effect on your credit score:

  • Your payment history
  • The amount you owe on open accounts
  • Length of your credit history
  • New credit you’ve been granted
  • Types of credit you use


Q: Will I be penalized for shopping around for the best interest rate?

A: Frequent inquiries can decrease your score since it indicates that you’re looking for credit. However, you can reduce the likelihood of having your score decreased if you do all of your shopping over a short period of time, such as 14 days.

Q: How can I maintain a high credit score?

A: Anything from being late on a payment to having too much credit – even if you always pay on time – can hurt your credit scores. Keep these five pointers in mind to help make you more desirable to lenders:

  1. Pay your bills on time
  2. Don’t apply for excessive amounts of credit
  3. Don’t use all of your available credit. Lenders like to see a lower “balance-to-credit-limit” ratio – meaning you have more credit than you actually use.
  4. Don’t close old credit card accounts, because that can shorten your credit history and raise your “balance-to-credit-limit” ratio.
  5. Check your credit report annually for mistakes, and correct errors as soon as you notice them.


Ready to get an idea of the kind of commercial loan you could secure with your credit score? Visit the Commercial Direct Loan Customizer and tell us about your finance request.

Author: Salomon Wancier

Salomon Wancier is a creative and innovative Marketing Executive and Business Coach with 19+ year record of achievement managing marketing teams, forming strategic alliances, developing and directing marketing initiatives and using multiple vehicles/channels in continuously changing environments to increase sales and profits.

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