Are You a Sub-prime Borrower? Hopefully, Not!

According to the Corporation for Enterprise Development (CFED), 56% of Americans have a sub-prime FICO score of 660 or lower.  In 2006, the percentage of Americans with sub-prime FICO scores was 48%. 

A FICO score of 660 or lower is just one measure that is used to identify a sub-prime borrower.  Other measures used to identify these sub-prime borrowers are as follows:

1. Two or more 30-day delinquent payments in the past 12 months, or one 60-day delinquency in the past 24 months. (In other words, don't miss that credit card payment!)
2. A foreclosure or charge-off in past 24 months.
3. Bankruptcy in the last 60 months.
4. Qualifying "debt/income" ratio of 50% or higher.

FICO points system ranges from 300 to 850.  The following categories indicate what those ranges are from "Poor Credit to Excellent:"

1. 350 to 619: Poor Credit
2. 620 to 659: Sub-Prime Credit
3. 660 to 720: Prime Credit
4. 721 to 750: Prime Plus Credit
5. 751 to 850: Excellent Credit.