Credit Still Tightening

Elizabeth Duke, a governor on the Federal Reserve board, reported last month that credit for both consumers and businesses continues to tighten. Banks tighten credit by raising credit score requirements, reducing credit limits, and/or increasing requirements for “skin in the game”. “Skin in the game” refers to a larger down payment for a mortgage or car loan, or increased collateral for commercial loans. For a variety of reasons both strong and weak banks are cutting back on lending. An uncertain economic outlook as well as concerns about government intervention are commonly cited.

What can you do?

The importance of a good credit score can not be overstated. The higher your credit score, the better your chances of getting any type of loan, as well as a lower interest rate. Check your credit score to see if any erroneous reports are pulling your score down. Be sure to pay your bills on time and keep revolving credit balances as low as possible. Being too close to your credit limit will have a negative impact on your credit score.

Consumers are reporting more flexibility and better results by using credit unions for credit cards. A mortgage banker with several different investors has more options for a mortgage than a bank. If a bank or credit union turns you down for a car loan see if the auto dealer can help. Like a mortgage banker they often have multiple sources for financing.

Check the financial rating of a financial institution at If a bank has a five star rating they are in a better position to lend than a bank with a one star rating.

Always interested in your comments or questions.

Good luck,


Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Your Lender for Life!

When people you care about need a mortgage,

for purchase or refinance, please do not keep me a secret.

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