Learn More about Bad Credit

Your individual credit history determines your "credit score," a grade assigned by a scoring agency. 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 inquiries to credit reporting agencies -- all are factors in your credit score.

If you suspect that you might be a candidate for an imperfect credit loan, you can use these general guidelines as a very rough rule of thumb. And you're welcome to try our Credit Grade Calculator as well.

There's actually now an 'official' definition of what constitutes a subprime borrower. At least as it pertains to banks, and how much capital they need to hold to offset the risk of holding such a loan in their portfolio of loans.

Banking regulators consider you to be a subprime 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 chargeoff in the past 24 months; any bankruptcy in the last 60 months; qualifying debt-to-income ratios of 50% or higher; and, "limited ability to cover family living expenses each month". Keep in mind 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 subprime market.

However, only the lender can determine your status -- missing a credit card payment or two does not automatically mean that you're doomed to double-digit interest rates. The only sure way to know where you stand is to talk to the lenders which specialize in these matters.