About Your Credit Score

Before lenders make the decision to give you a loan, they must know that you are willing and able to pay back that loan. To assess your ability to repay, they assess your debt-to-income ratio. To assess how willing you are to repay, they use your credit score.

Fair Isaac and Company developed the first FICO score to help lenders assess creditworthines. You can find out more about FICO here.

Your credit score is a direct result of your repayment history. They never consider income, savings, amount of down payment, or demographic factors like gender, race, national origin or marital status. Fair Isaac invented FICO specifically to exclude demographic factors. Credit scoring was developed to assess a borrower's willingness to pay without considering any other irrelevant factors.

Past delinquencies, derogatory payment behavior, debt level, length of credit history, types of credit and the number of credit inquiries are all calculated into credit scoring. Your score comes from the good and the bad in your credit history. Late payments lower your score, but consistently making future payments on time will raise your score.

For the agencies to calculate a credit score, you must have an active credit account with a payment history of at least six months. This payment history ensures that there is sufficient information in your credit to generate a score. If you don't meet the criteria for getting a score, you might need to work on your credit history prior to applying for a mortgage loan.

Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234 can answer questions about credit reports and many others. Call us: 2146635355.