Finding money now can be difficult without premiere credit

The world of lending changed drastically

Getting money now is different than it was a few years ago. What a lot of Americans have learned is that since the recession, lending is an entirely revamped process. People who have tried to take out loans recently may have been surprised at the new rigors of qualification. Martin Seaverman of Portland, Oregon said, “I used to be able to get moderate rates when it comes to credit… since the recession I have had a hard time finding anything reasonable.”

Due to changes in the credit lending industry, many consumers are cautioned to start changing their ways when it comes to dealing with credit. Regardless of your feelings about credit, it is a necessity in today’s world. For most Americans, big-ticket items can’t easily be funded without finding lenders. The recession changed credit, though, and how consumers qualify for it.

Applying for credit

A few years ago, anyone with a credit score of 620 or higher was considered a great borrower. In 2008, that number was increased to 680. Then in April of 2009, lenders began looking for a score of 720 or higher for lending. The aftermath of the economic downturn is that consumers with seemingly good credit are being turned away by lenders. People who formerly were satisfied with their credit scores are now being forced to make considerable changes in their credit habits to move them up, or pay more for higher rates. Mortgage broker Todd Huettner said, “What used to be great [credit] is now only good.” He also added that refinancing that may have worked a year ago may not make sense now. Many homeowners looking to refinance are finding it difficult although they thought their credit was good enough. Huettner added, “The costs of rate adjustments are enough to make a refinance that would have otherwise make sense, have no benefit to the borrower.” Refinancing at a high rate is not a good option for any homeowner, but many are finding that it is the only option they are being given.

The current state of lending

What specifically happened to leave Americans looking for money now, out in the cold? The nation’s two largest mortgage lenders, Fannie Mae and Freddie Mac, both suffered huge losses as the result of last year’s recession. Because of the huge defaults, the companies redefined what risk they would take and price adjustments were made for anyone with FICO scores below 720. Sean Cragg, VP of Sales for Gold Star Mortgage, said, “These fees have nothing to do with your mortgage company or its various products and they cannot be negotiated away.”

What can Americans do to manage?

Borrowing money now isn’t totally out of the question. Americans can still take the necessary moves to increase their credit scores. Making all payments on time, paying more than the minimum and watching charges can all help in managing credit. Now, more than ever, having a great credit score is a necessity. It will take time for the market to become more lenient, but if consumers focus on improving credit, they will still have a wide selection of options when it comes to borrowing money.

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