Credit Scoring

Before lenders make the decision to give you a loan, they have to know if you are willing and able to repay that loan. To assess whether you can repay, they look at your income and debt ratio. To assess your willingness to repay, they use your credit score.

Fair Isaac and Company calculated the original FICO score to help lenders assess creditworthines. For details on FICO, read more here.

Credit scores only take into account the information contained in your credit profile. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was developed to assess willingness to repay the loan while specifically excluding any other personal factors.

Your current debt load, past late payments, length of your credit history, and a few other factors are considered. Your score reflects both the good and the bad in your credit history. Late payments count against your score, but a record of paying on time will raise it.

To get a credit score, borrowers 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 report to generate an accurate score. Some borrowers don't have a long enough credit history to get a credit score. They should build up credit history before they apply for a loan.

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