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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 B-C-D 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 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 Rates. 24 - 48 mos. since bankrupt discharge. Higher number of rolling Rates 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" Rates 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. Judgments to be paid w/ loan proceeds. Not in foreclosure.
 

 

Poor payment record with limited 90 day, isolated 120 day
E 520- 65 50-65

Mortgage
Installment/
Revolving

Poor payment record with a pattern of 30, 60, and 90+ Rates

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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