Prime or Sub-prime

The dark side clouds everything..

 

I don't think any of them are prime. Prime usually refers to cards with less than 10% or so interest rate.

 

I'd have to say under 10% for an interest rate... No BT fees... And generous CLs.

One I really like after studying is National City. On some cards, they have the same rate whether it's a purchase, BT, or cash advance. And it's all 9.99%Now I call that prime!

 

I've often wondered how a sub-prime card lessens the overall credit score. Does each credit card have a certain number of points assigned to it? Sounds a wee bit strange.

 

According to FICO the name on the card does not effect your score. But I am guessing if a mortgage broker or finance manager was reviewing your report, and saw, providian, orchard, crap1, etc... It could influence their decision.

 

A ha! Just what I thought..according to myfico.com's website, the fico score determines the percentage you can expect to pay on a mortgage loan, not the "lender's interpretation" of your credit report, right?

So if credit score is not affected by subprime cards, then what difference does it make if your card is prime or subprime, at least in the area of mortgage qualification?

 

It doesn't matter.
Mortgage people are far more worried about your job situation, income, and your debt load.

I got a 500K mortgage with a credit report filled with the likes of Providian, First Premier, Cap.1, and Compucredit, and even a BK. Never a word mentioned.

BUT, because I was at the same job for 7 years, had thousands in cash + a nice stock portfolio, that was what really mattered.

Even with MBNA, they cared more about job stability and income.

 

Subprime is used to describe a market sector characterized by consumers with damaged or no credit. Subprime credit cards or loans typically require security deposits, annual or application fees, or higher percentage rates because consumers who apply for these offers have had credit problems in their past or lack credit altogether.

Prime is used to describe a market sectore characterized by consumers with good or excellent credit. Prime credit cards or loans usually do not require security deposits or application fees, offer lower percentage rates and reward programs alongside other benefits.

 

and to take it one step further...this thread already has more insight into credit then most underwriters have or look for. They go mainly by the numbers....and then look at CO and negatives. NO WHERE will guidelines say "5 positive tradelines that have a credit value of...." they wioll just look for the AMOUNTS of the tradelines as you will need some mionor and some major accounts. I truly wish underwriters and lending board members had the knowledge that everyone on this board has as far as credit. How their loan affects your credit.....how your credit picture can change 45 points in a day with no changes in your credit, how a HELOC can affect your score...all of this is foreign to most of the powers that be in mortgage. If that doesn;t scare you , open up the phone book and call up a mortgage broker and ask them two things:

What factors help or hurt a credit report ("just pay off your collections" will be a popular one)

What factors drive the interest rates from day to day and whats the outlook for today ("uh I think I will get a ratesheet tommorow morning some time I'll let you know then")

It is amazing how from the bottom up to the underwriters we have people that truly don't understand the affects of credit or the things that drive rates.

Thank goodness for all of the places like this popping up on the net and educating consumers.....er and mortgage guys as well.