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What’s “Good” Credit? : Mortgage Loans, Rates, Home Buying, Selling, Foreclosures

What’s “Good” Credit?

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While lenders would love to see perfect credit, they realize that few prospective borrowers can meet such a standard. That’s a good thing for lenders — otherwise no one would be able to make loans.

If not perfect credit, how about “good” credit? Lenders generally allow some slack in credit activities. Within the past 12 months, a typically borrower might be allowed to have the following credit dings and still qualify for a mortgage at usual rates and terms:

  • Two credit card payments more than 30 days late.
  • No credit card payments 60 days late.
  • One installment payment, such as an auto payment, 30 days late.
  • No installment payments 60 days late.
  • No mortgage or rental payments 30 days late.
  • No outstanding debts such as judgments.

Credit reports do not show a payment as “late” unless it has been made at least 30 days past due. This does NOT mean it’s okay to have a payment that’s a few days late. A late payment can lead to fees and charges — and predatory lenders may actually call the loan.

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