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Credit Grades
Mortgage companies often grade your loan based on certain credit related items such as payment history, amount of debt payments, bankruptcies, equity position, and your credit score. Below is a guide to help you estimate your credit grade. This is only a guide as many companies have exceptions that may result in stricter or more lenient guidelines
A General Guide to A, B, C & D Credit Grades
Quality Level |
Credit Score |
Debt Ratio |
Max LTV Ratio Type |
History for Credit |
Delinquencies: |
Typical
Additional
Requirements |
| No. of Time |
No. of Days |
within last |
|
A+ to A- |
670+ 660 |
28/ 38 |
to
95% |
Mortgage Installment / Revolving |
0
0-1
0-1 |
-
30
60 |
24 mo
12 to
24 mo |
Good/Excellent credit during last 2 to 5 years. No bankruptcy within the last 2 to 10 years |
| B+ to B- |
620 |
50 |
75 - 85 |
Mortgage Installment / Revolving |
2 - 3
2 - 4
0 - 2 |
30
30
30 |
12 mo
12 mo
12 mo |
No 60-day Mortgage lates 24-48 mos since bankrupt discharge. Higher number of rolling Lates may be allowed |
| C+ to C- |
580 |
55 |
75 |
Mortgage Installment / Revolving |
3 - 4
0 - 2
4 - 6
2 - 4 |
30
60
30
60 |
12 mo
12 mo
12 mo
12 mo |
12-24 mos
since bankrupt
discharge. High
"rolling" lates
allowable. |
| D+ to D- |
550 |
60 |
65 -70 |
Mortgage Installment / Revolving |
2 - 6
1 - 2 |
60
60 |
12 mo
12 mo |
Bankruptcy discharge within last 12 months paid w/ loan proceeds. Not in foreclosure. |
| |
Poor payment record with limited 90 days, isolated 120 days. |
The figures shown here are estimates. When trying to figure your credit grade, keep in mind the principles:
When your have bad credit, all of the other aspects of the loan need to be in order. Equity, stability, income, documentation and assets play a larger role in the approval decision.
When determining your grade, various combinations are allowed, but the worst case will push your grade to a lower credit point. Late mortgage payments and bankruptcies are the most important.
Credit patterns are very important. A high number of recent inquiries and more than a few outstanding loans may signal a problem. A “willingness to pay” is important, thus late payments in the same time period is better than random late payments as they signal an effort to pay even after falling behind. |
