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
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Delinquencies: |
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| Quality Level |
Credit Score |
Debt Ratio |
Max LTV Ratio |
History for Credit Type |
# of times |
# of days |
Within last |
Typical Additional Requirements |
| A+ to A- |
850 720 |
28/38 |
To 95% |
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- |
719
680 |
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 rates may be allowed. |
| C+ to C- |
679
640
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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.
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| D+ to D- |
639
580 |
60 |
65 - 70 |
Mortgage Installment/Revolving |
2 - 6
1 - 2 |
60
60 |
12 mo
12 mo |
Poor payment record with limited 90 day, isolated 120 day
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| E |
580- |
65 |
50-65 |
Mortgage Installment/Revolving |
Poor payment record with a pattern of 30, 60, and 90+ rates
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Possible current bankruptcy, foreclosure Stable current employment
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The figures shown here are estimates. When trying to figure your credit grade, keep in mind the following principles:
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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.
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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.
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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.