FICO scores linked to Mortgage Delinquencies

In the wake of the mortgage meltdown all over the country, FICO scores are being scrutinized even more than ever before. Even for those with higher credit scores like 680 or higher, banks are reviewing credit limits with a keen eye. Why? The perception is that, even if you are not feeling the credit pinch, have a loss of income or you are not one the unfortunate who's is experiencing an issue with a high mortgage payment, you could still be a high risk borrower! Now, what is that about?

I hear you, I have noticed banks are acting rather funny with anyone and everyone.
Myself included! That's right, I am not very happy with American Express! I guess many card holders have credit problems, so they are treating everyone the same!

Well, here is the breakdown; at one time, even relatively recently in the last 5 years, FICO scores were not so heavily dependent on receiving a mortgage. Other factors were considered, it wasn't just the credit scores. As the mortgage meltdown has created scarcity for easy credit, a review of FICO scores and their link to the possibility of a delinquency on a mortgage payment is being studied, here is what it looks like:

Lenders studied the relationship between credit scores and mortgage delinquencies. There was a definite relationship. Almost half of those borrowers with FICO scores below 550 became ninety days delinquent at least once during their mortgage. On the other hand, only two out of every 10,000 borrowers with FICO scores above eight hundred became delinquent.

So lenders began to take a closer look at FICO scores and this is what they found out. The chart below shows the likelihood of a ninety day delinquency for specific FICO scores.

The scores below are rated in the likely-hood that a payment would be missed.

1) 595 FICO reveals that odds in 2.25% to 1 says you will miss 1 payment
2) 615 FICO reveals that odds in 9 to 1 says you will miss 1 payment
3) 630 FICO reveals that odds in 18 to 1 says you will miss 1 payment
4) 645 FICO reveals that odds in 36 to 1 says you will miss 1 payment
5) 660 FICO reveals that odds in 17 to 1 says you will miss 1 payment
6) 680 FICO reveals that odds in 144 to 1 says you will miss 1 payment
7) 700 FICO reveals that odds in 288 to 1 says that you will miss 1 payment
8) 780 FICO reveals that odds in 576 to 1 says that you will miss 1 payment

Now, are those some interesting numbers? I was shocked to learn this!

Drop me an email, I would like to hear your opinions in this issue. I will stand by!

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