What does Subprime Mean?
How do I know if I’m a subprime borrower? Every lender defines subprime a little differently, but generally speaking, if your credit score is lower than 660, you may be considered subprime.
What causes my score to be low? The subprime distinction has very little to do with wealth or income and everything to do with credit history. There are many factors that go into calculating your credit score: number of credit lines, length of time open, amount of available credit and how much of it you use. And any of the following in the last few years will have a major negative impact:
- Two or more 30-day late payments in the last year
- A foreclosure
- A bankruptcy
What does being subprime mean to me? If your credit score falls into subprime territory, you may still be able to get a loan, but you may pay quite a bit more than consumers with better credit. Think about whether or not it makes sense to wait to apply for a loan until you’ve improved your credit (a score of 700 is a good goal). It could be worth the wait.
What else makes a good loan candidate? Your credit score is a major factor in getting a home loan, but not the only one. If you have a score of 700 or higher, if you can put at least 10 percent down and if you can document your income, you improve your chances of being considered a good loan candidate.
Get Started Now!
- Check Your Credit Report & Credit Score now!
- Start a Loan Request
- Sign up for our News Feeds
- Have Questions? Call 1-800-GET-SMART (1-800-438-7627)
