Failing Credit?
43 million people + now have a credit score of 599 or below putting them in a “poor risk” category for borrowing money.
Five or six years ago everyone was living the life of a rockstar, buying up that San Diego real estate and sporting a Mercedes, and now we see the foundation of what we stood on and what sustained us falling away. The credit scores of millions more Americans are sinking to new lows.
25 % of consumers which is almost 43 million people have a credit score below 599. That puts them in a poor risk category for lenders.
I read an article recently stating that those 43 million probably won’t be able to get credit cards, auto loans or mortgages under the new banks lending standards.
I guess they should have kept their standards a little higher a few years ago.
Apprarently in the past FICO scores weren’t as volatile, half the number of people fell below 599 before the recession.
Nowadays if you find yourself in the mid-range scores, this is exactly the category that my feel the effects of the tighter standards. FICO anticipates that the midrange (between 650 and 699) are looking to buy homes or cars but finding it hard to qualify for affordable loans.
Just recently a loan officer saw the effects of that when a client with a score of 679 walked away from buying a house because he could not get the best interest rate on a $100,000.00 mortgage.
If his score had been 680, the rate he was offered would have been a half-percent lower. Thge difference only came out of $31.00 per month, but over a 30-year mortgage it would added up to an $11,000.00 penalty.
Not to mention that when you are wheeling and dealing with San Diego real estate, you sure don’t deal with too many $100,000.00 loans, so the stakes are higher.
How is the report card looking for everyone’s credit report? If you want a referral from us for a loan officer, feel free to email at [email protected] and we’ll point you in the right direction so you can find out where you stand.
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