About Your Credit Score

Before lenders make the decision to give you a loan, they want to know that you're willing and able to repay that mortgage loan. To assess whether you can pay back the loan, they assess your income and debt ratio. In order to calculate your willingness to pay back the mortgage loan, they consult your credit score.

Fair Isaac and Company calculated the original FICO score to assess creditworthines. We've written more on FICO here.

Your credit score is a direct result of your history of repayment. They do not consider your income, savings, amount of down payment, or personal factors like gender, race, national origin or marital status. Fair Isaac invented FICO specifically to exclude demographic factors. Credit scoring was developed to assess willingness to pay without considering other irrelevant factors.

Your current debt level, past late payments, length of your credit history, and a few other factors are considered. Your score results from positive and negative items in your credit report. Late payments count against you, but a record of paying on time will improve it.

To get a credit score, borrowers must have an active credit account with a payment history of six months. This history ensures that there is enough information in your report to calculate a score. Some borrowers don't have a long enough credit history to get a credit score. They may need to build up a credit history before they apply.

Tenby J. Dahman The Dahman Team can answer questions about credit reports and many others. Give us a call: 3038627760.