(July 11, 2008) - Bankers and mortgage lenders are say Central Texas remains a healthy market for getting loans for houses and cars, but they also say the requirements to qualify for loans are getting stricter and are more widely enforced.

Sherry Craft of Wallik and Volk Mortgage Bankers in Waco, says among the many factors used in the qualification process, credit scores are coming under increasing scrutiny.

"Credit scores are more important than they've ever been before. All pricing, the type of loan you can get, whether or not you can get a loan,” she said.

Craft says that's because regulations in the banking industry across the U.S. are tightening in part because of the scare created by the mortgage crises on the East and West Coasts.

She said the housing market in the Waco area is comparatively stable compared to markets in those areas, but that the awareness created by the issue trickles down to this region.

“They affect us, even though we haven't done anything to cause them to happen," she said.

Lark Smith of Heart O' Texas Federal Credit Union in Waco, says the tightening of rules locally is the result of an effort by lenders to shield themselves from the extreme losses experienced elsewhere in the country because of defaults.

"What financial institutions are probably doing is protecting themselves now from what may be coming in the future," Smith said.

He said the higher requirements when it comes to credit score, debt ratio, collateral, and other factors will affect anyone who wants to borrow money in the near future.

But he says prospective borrowers are the ones with the power to make themselves qualified loan candidates.

"I think instead of being angry at the banking institution, they need to look at the situation and find out how they can correct their situation so they are more palatable to the financial institution,” he said

Pete Cervantez is a Waco resident who’ s struggling with bad credit.

"I can't get credit cards. I can't refinance my house right now,” he said.

Cervantez said he has been disabled ever since 2003 when he fell from a ladder at work, sustaining many injuries including three broken discs.

The right side of his body is now partially paralyzed.

Cervantez says that rising prices and unfortunate circumstances that befall individuals need to be taken into account in the loan application process.

"In the past, I had to file for bankruptcy, because my job went out,” he said.

“And then I got over my head in credit with credit cards and stuff like that. They got me in trouble and I had to file for bankruptcy,” he said.

Smith and Craft agree that the changes being seen in qualification requirements for loan approval do not exempt everyone with any negative listings on their credit reports.

He says it’s a good idea for everyone to get a free credit report once a year.

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