National organizations called credit bureaus develop credit scores and credit checks for American banks. Sub-prime mortgages were so called because they were offered to less-than-qualified borrowers — those whose credit scores were below the “prime” credit range. After this summer’s subprime loan upheaval, the public wants to know: exactly what is a good credit score?

The typical loan, however, only went to the kind of person who was not judged a repayment risk. This fact makes it disturbing how the USA’s $10-trillion mortgage market’s little-known subprime section caused such a major shock to credit markets all over the globe. However, it did, and this development caused not only pain and shock in other countries, but also some very sizeable losses domestically, as the US market underwent a sudden 10% drop.

When many subprime lenders were recently forced to close their doors and lay off employees, the funds available to those with challenged financial histories immediately dried up. Thus, anyone who planned to buy a house, car or other large item in the next couple of months and had recently applied for a loan quickly checked their online credit score to see if they still qualified. Many people were disappointed to find that within a matter of days, they were no longer eligible for their loans.

Many people have been sending requests for their credit report to the credit bureaus, and asking how to improve their credit. A consolation from the subprime loan mess is that people are paying more attention to the importance of their financial histories, and credit bureaus are making it easier to get this information.

The downside of the subprime loan blow up is many people are defaulting on their loans and will lose their homes. Fortunately, the rental market can support this change and, in most areas of the United States, there are plenty of affordable rental properties. Still, getting a loan for the foreseeable future is going to be more difficult for everyone.

The fallout of the subprime loan collapse is expected to last for at least two years, according to most financial experts estimations. The Federal Reserve bank has, however, recently made adjustments to the interest rate at which it loans money to banks, which should help the economy curb the impact of the subprime loan disaster and the turmoil it caused in the credit markets. Experts are also predicting that the Fed will cut interest rates in order to encourage consumer spending and to make loans more inviting for qualified borrowers.

- Daniel Lesser