Once upon a time, having sterling credit meant that banks and other lenders valued your business.

No more.

The subprime mortgage mess is now impacting even those who spent years building up their credit record, because banks are running scared.

A just released Federal Reserve study shows that: “About 55 percent of domestic respondents indicated that they had tightened their lending standards on prime mortgages.”

An Associated Press article says that figure is up from about 40 percent just this past November.

This is, perhaps, the strongest indication yet of just how painful the current credit crunch is likely to be for months to come; maybe years?

And, the mortgage/credit crisis has spilled over into business loans, too, with the Federal Reserve survey finding banks have tightened up their standards for loans to businesses.

This raises the issue of who exactly is going to buy up all those vacant or soon to be vacant houses on the market?

Earlier predictions by some were that those with really good credit will be able to take advantage of a buyer’s market. But, that is only the case if they can get credit themselves. The latest survey would seem to indicate that that is increasingly problematic.

So, now what?

Think anyone really knows??

credit, subprime mortgage, credit crunch, mortgage, Federal Reserve

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Tags: Credit, federal reserve, prime mortgages, subprime mortgages