During the height of the housing boom here in Silicon Valley, your FICO score didn’t matter much due to the plethora of mortgage brokers willing to “bend” the rules to make a deal. During today’s market, this is a different story. According to a recent article by The Silicon Valley Real Estate Report, lenders have plotted the likelihood of default by FICO score and here are the results:
| FICO Score |
Odds of a delinquent account |
||
| 595 |
2.25 |
to | 1 |
| 600 | 4.5 | to | 1 |
| 615 | 9 | to | 1 |
| 630 | 18 | to | 1 |
| 645 | 36 | to | 1 |
| 660 | 72 | to | 1 |
| 680 | 144 | to | 1 |
| 700 | 288 | to | 1 |
| 780 | 576 | to | 1 |
Given the current foreclosure mess, who would you want to lend to?
Mortgage brokers do review credit reports to see if there is a chronic problem, or an “event-driven” lowered credit due to a health issue or job loss. If the issue is event driven and the event has been resolved, they are apt to be more lenient.
Issues that affect your credit score include:
- Too many recent credit inquiries
- Too many new accounts opened
- Tax liens, judgements or bankrupcies
- Balances near or over the credit limit
- Delinquencies
- Too short of a credit history
- Too few or too many open accounts
A really good mortgage broker will work with you to address any issues you have on your credit report so that he or she can get you the very best loan for your unique needs.