About Your Credit Score

Before lenders decide to lend you money, they need to know if you're willing and able to pay back that mortgage loan. To figure out your ability to repay, they look at your debt-to-income ratio. To assess your willingness to pay back the loan, they consult your credit score.

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

Your credit score is a direct result of your history of repayment. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors like these. "Profiling" was as dirty a word when these scores were first invented as it is today. Credit scoring was developed as a way to take into account only what was relevant to a borrower's willingness to repay a loan.

Deliquencies, payment behavior, current debt level, length of credit history, types of credit and the number of inquiries are all calculated into credit scores. Your score considers both positive and negative items in your credit report. Late payments count against your score, but a consistent record of paying on time will raise it.

For the agencies to calculate a credit score, borrowers must have an active credit account with a payment history of six months. This payment history ensures that there is enough information in your report to generate a score. Some people don't have a long enough credit history to get a credit score. They may need to spend a little time building up credit history before they apply for a loan.

1st Credential Mortgage Inc can answer your questions about credit reporting. Call us at (281) 778-0805.