About Your Credit Score

Before they decide on the terms of your mortgage loan, lenders want to discover two things about you: whether you can pay back the loan, and how committed you are to pay back the loan. To assess your ability to repay, lenders 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 assess creditworthines. We've written a lot more about FICO here.

Credit scores only consider the info contained in your credit profile. They do not consider your income, savings, amount of down payment, or factors like gender, ethnicity, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was developed to assess a borrower's willingness to repay the loan without considering any 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 information in your credit report. Late payments count against your score, but a consistent record of paying on time will raise it.

Your credit report must contain at least one account which has been open for six months or more, and at least one account that has been updated in the past six months for you to get a credit score. This payment history ensures that there is sufficient information in your report to generate a score. Should you not meet the minimum criteria for getting a score, you may need to work on your credit history before you apply for a mortgage loan.

1st Credential Mortgage Inc can answer your questions about credit reporting. Give us a call at 2817780805.