Excellent credit score is higher than you may think : Bad Credit Advisor

Excellent credit score is higher than you may think

And having one is not enough these days to obtain a loan. What is an excellent credit score in today's credit mess? The short answer is a middle score of 720 and above should do it. The long answer is a bit more complicated, as lenders now look at the length or depth of your credit history and yes, the size does matter. That is of your down payment. Your income must be sufficient to qualify as well.

Gone the days when credit scores above 700 could buy you a house, no matter what else. While it is possible to get a car loan on excellent credit score alone, especially when dealers are crying out loud enough to be heard on the opposite site of your town, buying a property is entirely different matter. You credit scores, no matter how excellent they are today must be backed up by solid work history and 20% down payment. Few credit unions are likely to finance up to 85% of a purchase for their members, but only for the loans not exceeding $417,000, and in some cases, $500,000. And we are talking about primary residence. Banks want to see at least two years of employment in the same field. Basically the lending is back to fundamentals which were in place before the madness. And lenders are likely to consider your excellent credit score somewhat less than that, unless your credit report shows at least 4 credit accounts that are 2 and more years old.

Other things that can complicate the situation are recent divorces, recently consolidated school loans with duplicate accounts, deferred school loans with no terms of repayment, alimony and child support which are scrutinized now more than ever, and anything else that can potentially diminish you income and ability to pay for your mortgage. Make sure you have all the paperwork ready before applying. With the recent sad news on newly delinquent borrowers, who went through mortgage modification program, even applications with the most excellent credit scores will be looked very closely.

Last thing is, many lenders don't want to see your credit scores from Equifax, TransUnion and Experian differ by much, and to fall under 680 threshold. If you have credit score of 688, 727 and 754, you should be fine, but if someone has 673, 735 and 751, more than few banks don't consider this to be an excellent credit score situation. You still are likely to get a mortgage, but with more paperwork, banks digging a bit deeper and interest rates a fraction higher.

Mon Dec 15, 2008 11:12PM by Tony | More in Credit Repair | Comments (0)

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