Bad credit scores might not immediately kill the deal.
The Situation
This client was referred to me because his TransUnion score was in the 520’s.
Why it Broke
The banker who referred this client to me shared that his income was great, but his TU score of 523 was not something that would work at this bank.
The Fix
This client had a large down payment from sale of a property, which is a huge compensating factor because his LTV was only 60%. Once we pulled a full tri-merge report and got a 551 mid score, then applied some of the proceeds from his sale to paying off all of his consumer debt, his DTI was only 25%.
Low LTV, Low DTI, and stable employment were enough compensating factors to get this purchase deal done, despite low credit scores and recent charge-offs.
The Lesson
Compensating factors can tilt the decision back towards approval, even if one approval factor looks rough.
The Takeaway
A big down payment often makes up for “iffy” credit.
Work with Me
Do you have a deal that doesn’t work internally?
Reply to this email with the scenario and I’ll take a thoughtful second look.
Or call me directly at 616.298.2743
You’re receiving this because we’ve connected professionally around complex lending or structuring scenarios that required a second look.