More homebuyers find credit scores hamper home loans

Poor credit scores are becoming an increasingly difficult hurdle for potential homebuyers to overcome, according to real estate website Zillow.com, which says roughly a third of Americans currently have credit scores so low that they’re unlikely to qualify for a mortgage. While the declining credit scores — nearly 30 percent of Americans have a credit score of 620 or lower — could explain this, changing attitude toward home lending could also be at fault. Stan Humphries, chief economist with Zillow, said that the recession has changed many lenders’ mindsets regarding credit scores. “Four years ago, in the era of easy-to-get subprime loans, many borrowers with low scores did buy homes, which in turn helped contribute to a housing bubble,” Humphries said. “Today’s tighter credit is a predictable response by banks after the foreclosure crisis.” TRD