PARAMOUNT MORTGAGE - LENDER'S BLOG

AnnaMaria Andriotis, Card Sharp - Until recently, a credit score of 680 was an achievement of which you could be justifiably proud. You would be a good home buyer prospect for any Realtor. A score of 680 used to mean a solid enough credit record to qualify for a mortgage at the best rates.

Not anymore. That once envious 680 is "firmly second-tier these days," says John Ulzheimer, president of consumer education at Credit.com. Now, borrowers need "at least 720 to get the best terms."

As for 680, it has become a casualty of the nation's economic malaise. "When Fannie Mae and Freddie Mac were backing mortgages after the crash, they settled on the 720 threshold for the best pricing," says Keith Gumbinger, a vice president at HSH Associates, a mortgage-data tracking firm.

While earning a 680 wasn't all that difficult for borrowers to achieve before the recession, the new good-credit bar of 720 is harder to reach.

To get there, a consumer would need low balances on credit cards and a 15-year credit history. You must also have a good payment history over the last two years.

Even paying on time won't protect you from dropping from the mid-700s if you've applied for several new credit cards recently.

Credit scores can be hurt if you carry balances of more than 30% of your credit line or you have a short credit history, regardless if you always pay on time.

For someone on the cusp, falling below the preferred 720 score could easily happen with one extra credit inquiry - like when a prospective employer pulls your credit report without telling the credit bureaus it's strictly for employment reasons.

The same thing could happen if you're suddenly "using more of your available credit because you made a big purchase," says Ulzheimer.

What's a 680 to do? Sadly, not much beyond the regular steps to credit score maintenance, experts say.

That means paying bills on time and keeping debts to a reasonable level. "And be patient," says Ulzheimer: "As lending picks up, lenders will be forced to relax their standards once again. Within as early as six months to a year, 680 could be back on top."