About Your Credit Score

Before lenders decide to lend you money, they have to know that you are willing and able to repay that loan. To assess your ability to repay, they assess your income and debt ratio. In order to calculate your willingness to repay the mortgage loan, they consult your credit score.

Fair Isaac and Company built the first FICO score to assess creditworthines. We've written a lot more on FICO here.

Credit scores only assess the info contained in your credit reports. They don't consider income or personal characteristics. These scores were invented specifically for this reason. "Profiling" was as bad a word when these scores were first invented as it is now. Credit scoring was developed to assess willingness to repay the loan while specifically excluding other irrelevant factors.

Past delinquencies, payment behavior, debt level, length of credit history, types of credit and the number of inquiries are all calculated into credit scores. Your score is calculated wtih both positive and negative items in your credit report. Late payments will lower your score, but establishing or reestablishing a good track record of making payments on time will improve your score.

To get a credit score, you must have an active credit account with a payment history of six months. This history ensures that there is sufficient information in your credit to calculate a score. Some folks don't have a long enough credit history to get a credit score. They may need to spend some time building credit history before they apply.

At Tenby J. Dahman The Dahman Team , we answer questions about Credit reports every day. Give us a call: 3038627760.