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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 more strict or more lenient guidelines.

A General Guide to Credit Grades

Quality Level	Credit Score	Debt Ratio	Max LTV Ratio	History for Credit Type	Delinquencies:			Typical Additional Requirements
					# of times	# of days	Within last
A+ to A-	670+ 660	To 55%	To 107%	Mortgage Installment/ Revolving	0 0 - 1 0 - 1	- 30 60	24 mo 12 to 24 months	Good/excellent credit during last 2 to 5 years. No bankruptcy within the last 2 to 10 years.
B+ to B-	620	55	95 - 100	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 months since bankrupt discharge. Higher number of rolling lates may be allowed.
C+ to C-	580	55	100	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 months since bankrupt discharge. High "rolling" lates allowable.
D+ to D-	550	50	85 - 95	Mortgage Installment/ Revolving	2 - 6 1 - 2	60 60	12 mo 12 mo	Bankruptcy discharge within last 12 months. Judgments to be paid w/ loan proceeds. Not in foreclosure.
					Poor payment record with limited 90 day, isolated 120 day
E	520-	50	80-90	Mortgage Installment/ Revolving	Poor payment record with a pattern of 30, 60, and 90+ lates			Possible current bankruptcy, foreclosure Stable current employment

The figures shown here are estimates. When trying to figure your credit grade, keep in mind the following principles:

• Other Things Being Equal
  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.

• Worst Case Scenario
  When determining your grade, various combinations are allowed, but the worst case will push your grade to a lower credit guide. Late mortgage payments and bankruptcies are the most important.

• Going Once, Going Twice
  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.

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