Credit Score Under 600? New Rules Make That Loan Unlikely
NEW YORK (TheStreet) -- If you were wondering whether your low credit score qualified you for a home or car loan, the U.S. government has an answer for you:
That's basically the response from the Federal Reserve in its Senior Loan Officer Opinion Survey released this week.
The report, which surveys credit and lending professionals from more than 90 global financial institutions, measures bank loan activity to households and businesses over the past 90 days.
The survey did see a significant rise in residential mortgages, auto loans and commercial real estate loans. It also notes that lending standards for commercial real estate loans lightened over the past three months, but standards for residential home loans remained unchanged.
On the credit score front, the good news from the Federal Reserve report was that lending standards for FHA-approved loans stood at 2006 levels, but only for consumers with sterling credit.
For those consumers with credit scores below 660, the news wasn't so positive. The report notes that borrowers with scores lower than 660 had "tightened."
Additionally, the report notes that:
- Most home refinancing loan applications were linked to the Home Affordable Refinance Program, and that a "significant portion of HARP 2.0 applications were expected to be completed."
- A "modest" number of banks reported "an easing of standards on credit card and auto loans."
- Demand for "most other loans" remained stable over the 90 days.