Your individual credit history determines your credit score which is a number assigned by a scoring agency through Experian, Transunion and Equifax. The score is a number which is a measure of your past credit history. The number of credit accounts you hold; your potential for borrowing; even the number of the inquiries to the Credit Reporting Agencies are all factors in your credit score.
The actual official definition of what constitutes a sub-prime borrower, is at least as it pertains to banks and how much capital they need to hold to off set the risk of holding the loan as well as their portfolio of loans.
Banking regulators consider you to be a sub-prime borrower if you have a FICO score of 660 or lower; two (or more) 30 day delinquencies in the past 12 months, or one 60 day delinquency in the past 24 months; a foreclosure or charge-off in the past 24 months; any bankruptcy in the last 60 months; qualifying debt-to-income ratios of 50%s or higher; and, “limited ability to cover family living expenses each month”. Always remember that these definitions apply specifically to banks and thrifts which hold these loans in portfolio, and that these lenders make up only a small portion of the sub-prime market today.
Lastly, only the lender can be the one who can judge your credit based on there underwriting guidelines that most companies have to follow on a daily basis, to stay in compliance. If you miss a credit card payment or two, that doesn’t automatically mean that you are stuck into paying in the double-digit interest rates.
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