A Credit Borrower
What's Your FICO.
When looking at mortgages and some business loan products, an “A” Credit Borrower is usually someone who has a credit score of over 720. Although the higher the ticket item, the higher that number will be. A good rule of thumb, you are finance ready at 750 or higher.
The credit score is usually the “mid score” or the middle of the three credit scores that a borrower receives from the different credit bureaus on their credit report.
For example, a borrower’s three credit scores are:
In that case, their mid score is 710. Having one of the scores above 720 is not enough.
Now a borrower with credit scores of:
In this case, their mid score is 725, and they are considered an “A” credit borrower.
A borrower with this type of credit normally qualifies for better rates and faster funding times from lender. Borrower 750 or higher will qualify for the best rates, and products lenders have to offer.
Lender rates are usually a combination of:
- credit score
- ability to document income
- ability to document assets
- downpayment size
- amount of equity in a property
Having a very high credit score is one of many factors that will go into the lender calculating your interest rate.
A borrower with a 725 mid credit score on their credit which is seeking 100% financing typically will end up with a higher rate than a borrower with a 700 mid credit score on their credit if this borrower is making a 30% down payment. From the lender’s perspective, a 30% down payment helps make their loan a lot less risky. As such, they can offer a better rate.
Michele Y. Thompson is an author, contributing writer on MyStock911 and MortgageExpertGuide , commercial mortgage broker, entrepreneur, and finance coach. The culmination of her work in mortgage banker finance, global investor services, real estate, and debt consulting; along with her advanced degrees has driven her to help new and existing businesses reach their goals for over 20 years.