About Your Credit Score

Before they decide on the terms of your loan (which they base on their risk), lenders must know two things about you: whether you can pay back the loan, and your willingness to pay back the loan. To figure out your ability to pay back the loan, lenders assess your debt-to-income ratio. In order to assess your willingness to repay the loan, they consult your credit score.

The most widely used credit scores are called FICO scores, which Fair Isaac & Company, a financial analytics agency, developed. The FICO score ranges from 350 (high risk) to 850 (low risk). For details on FICO, read more here.

Your credit score comes from your history of repayment. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to take into account only that which was relevant to a borrower's willingness to repay a loan.

Past delinquencies, derogatory payment behavior, debt level, length of credit history, types of credit and number of credit inquiries are all considered in credit scores. Your score considers both positive and negative information in your credit report. Late payments count against you, but a consistent record of paying on time will raise it.

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 assign an accurate score. Some folks don't have a long enough credit history to get a credit score. They may need to spend a little time building up a credit history before they apply.

At 1st Credential Mortgage Inc, we answer questions about Credit reports every day. Call us at 2817780805.