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

 
Delinquencies:
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- 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 rates 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” rates 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 30, 60, and 90+ rates 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.