For future reference keep in mind lenders can check credit up to the day of closing. Most contracts do have a contingency for recovering your earnest money. If you used the Texas Real Estate Commission (TREC) contract you have paragraph 4 section (2) that stipulates, contract is subject to Buyer being approved for financing and the third party financing condition addendum spells out how many days you will be given to get approval, provision allows you to pullout of the contract without losing your earnest money if you cant get financing. "Time is of the essence for this paragraph." If you fall within this time limit you should be able to recover your earnest money.

Unfortunately your investment with the appraisal and inspection cost are lost.

My advise is check your credit report for errors. Your agent should help you.

First, unless you ran out of time, which is possible at this point more than 30 days after executing the contract, you should still have the opportunity to notify the seller of your inability to the get the loan and not lose your earnest money.

However, if the notification date has passed, the only hope is to ask the seller for a little more time to correct the problem and close later. Your Realtor should be able to help you work with the seller on this.

Second, you need to consult your loan officer (or maybe a different one) about what did change. Obviously, something did, or else your score would not have dropped so much. Often, problems can be fixed by paying off a debt, but if it is a new late payment that appeared, then you need a different approach.

Bank of America did just roll out its new program that scores borrowers using their own criteria, not the credit scores. Of course, there is no guarantee you'll qualify under that program either, but that would be the second choice. BoA still looks at payments and whether they're late and other activity on your credit report, they just don't use the 620 middle score criterion any more.

Lastly, be aware that some lenders use the middle score but the threshold is lower for some lenders. No, they will not allow lates in the last 12 months, but they can go down into the 530s for middle score, provided everything else is clean.

Soph-
I can still get you qualified with that score. It sounds like you are in an FHA loan. Most lenders (especially brokers) have implemented minimum score requirements on FHA files - even though this is not mandated by FHA. However, with Bank of America Home Loans, your score is not as relevant as your overall file is to us and I can have you approved in about 30 minutes. If you were approved before, you should be approved with us.

Fell free to call me if you'd like some assistance.
Luke Allison
Bank of America Home Loans
828-777-8828
luke.allison@bankofamerica.com

Hi Soph7674, although it is hard to say what happenned in your case, I do know that all credit agencies are going thru major changes in the way they score your credit in 2009 and you are right, all of our scores will change from one day to the next and there is nothing your agent could have done to prevent this.

By the way, there are tons of articles to read online about this if you just GOOGLE "credit score changes 2009" and read why.

The best thing to do now, is wait until your credit climbs back up again.

The first time my credit score was run I had a 620 medium score and now wihtout any infromation having changed my credit score is at 598 Can someone explain why?

Did your loan officer tell you what your new credit scores are? There are many loan programs that allow for less than perfect credit but with out the scores I would not be able to tell you what your next step is. If you have time send me an email or give me a call with this information and I will see what can be done. Thank you and you do have options.

Steve Ferguson