Do the well to do have good credit scores just because of who they are?

Deal Score0

I work with many residents and doctors who all have never worked a day in their lives. When they graduated and start working i am sure they have a ton of debt and bad credit scores but how are they able to buy homes in the 500,000 to million dollar range where i live. Do banks accomdate them becasue of potential income, as a professional curtousey (SP), because I am sure they have tons of debt, and live off of meager incomes and credit cards. How does this work?

2 Comments
  1. Reply
    Adam L
    July 21, 2011 at 12:20 am

    It’s income or money.

    If you make $ 500,000 per year, you can afford a much bigger house than someone who makes $ 50,000 per year, no matter what your credit rating is. The banks know this.

    Also, if they have never worked and live off inheritance, that means they may not need credit at all. You can pay cash for a home.

    Also, if you have rich parents, they frequently help with downpayments or co-sign the loan. That can help.

    Credit rating is not the only factor when applying for a loan – income is a big part of it. If you have an 830 credit score and no job, you can’t get a mortgage. Income is not part of the credit rating formulas, it’s a separate calculation.

    That said, it is probably not family lineage or professional courtesy. If banks did that, they would be opening themselves up to all sorts of equal lending lawsuits.

    –>Adam

  2. Reply
    Gone fishin'
    July 21, 2011 at 12:39 am

    YOur credit score shows how well you have managed your debt. Even if you owe money and are paying it off with no defaults then you have a good score. When you are purchasing major items like a home they look at your cash flow as well as your credit score and if it looks like you can handle the mortgage they will allow it.

    Leave a reply

    Register New Account
    Reset Password