Credit Score and Grades of Risk
Having good credit is not always a clear statement. To the top mortgage banking giants like Freddie Mac and Fannie Mae they evaluate credit as: good credit, better credit and best credit. Freddie Mac and Fannie Mae have recently been adding these “grades” on top of FICO scores, so the lower the “grade” the higher the risk, therefore incurring more rate hikes to the potential mortgage applicant. Scores above 740 will receive the best mortgage rates and rarely any extra fees. Scores from 720 to 739 get a rate increase of .125% added. Scores from 700 to 719 get a rate increase of .375%.Scores from 680 to 699 get a rate increase of .5%. The best advice for someone trying planning on getting a loan in the near future would be to pay down some debt and find out what your credit score is before you start shopping for a loan.
