Mortgage, Auto and Personal Loans Depend on Good Credit

Consumers looking for mortgage, auto or personal loans today may be surprised at their interest rates. A few years ago scores in the 600s were considered adequate for a loan approval at a moderate interest rate. In April of 2008, that required credit score jumped to 740. According to Rodney Anderson, senior managing partner of Rodney Anderson Lending Services, "What once was thought of as acceptable credit is no longer going to get consumers the money th! ey need. Some people would kill for a 600 credit score, but in today's world lenders are looking for a much higher score... scores in the 600s are considered risky."

The state of lending today

Prior to the recession any score of 700 or higher would have no problem finding a lender. Now, rate adjustments begin at 740, with every 20-point drop adding another adjustment. The result of the shift in credit scores is that people with decent scores need to pay more for loans or make quick changes in their credit habits to increase their scores. Some drops in credit scores may even be hidden to consumers. For example, Todd Huettner, president of Huettner Capital, said, "One of my clients always had a credit score of 740. When she went to refinance, she found out her score was at 719. The reason was she! put a new washer and dryer on a store credit card. Many store cards are actually revolving credit, which means your limit is essentially your starting balance. So that purchase maxed out her card and caused a 20-point score drop." ... click here to read the rest of the article titled "Mortgage, Auto and Personal Loans Depend on Good Credit"