In case you were looking for some tangible evidence of how tight the credit market has become…well, apparently all you need to do is attempt to apply for a mortgage. Seen in Zacks Commentary:
Typically, a minimum credit score of 680 has been required to get favorable rates on mortgages. This score has been perceived as the dividing line between good credit and mediocre or bad credit. Now, lenders are asking for scores of 720 or higher - a sign of significantly tighter standards.
To put these numbers in perspective, Experian’s National Score Index currently stands at 692. According to CreditReport.com, not a single state has an average credit score of 720 or better. (South Dakota had the highest average score at 710; Texas was the lowest at 651, followed by Nevada at 655.)
In other words, the average American has a credit score below the minimum currently required by mortgage lenders. At a time when many homeowners are looking to refinance adjustable rate mortgages and homebuilders need more buyers, this is not good news.
I’ve been doing work around the house in recent months, with an eye toward eventually selling and moving someplace warmer (and cheaper), taking advantage of the miracles of telecommuting. With mortgage lending as tight as it is now…well, it looks like I’ll have several months in which to make preparations.