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TERMINOLOGY

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 months
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. Judgements 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 3060 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.