Credit
"A" Credit Borrower
An "A" Credit Borrower is usually someone who has a credit score of over 720.
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, if a borrower's three credit scores are:
740
710
690
then their midscore is 710. Having one of the scores above 720 is not enough.
If a borrower had credit scores of:
740
725
710
then their midscore is 725 and they are considered an "A" credit borrower.
A borrower with this type of credit normally gets the best possible rates a lender will 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 who is seeking 100% financing may 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.
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Ben Afzal
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