About Your Credit Score

Before they decide on the terms of your mortgage loan, lenders need to know two things about you: whether you can repay the loan, and if you will pay it back. To assess whether you can pay back the loan, they assess your income and debt ratio. To assess your willingness to pay back the mortgage loan, they consult your credit score.

Fair Isaac and Company formulated the first FICO score to assess creditworthines. You can find out more about FICO here.

Credit scores only take into account the info in your credit profile. They don't consider income or personal characteristics. These scores were invented specifically for this reason. "Profiling" was as bad a word when FICO scores were first invented as it is now. Credit scoring was envisioned as a way to assess a borrower's willingness to pay without considering any other demographic factors.

Your current debt load, past late payments, length of your credit history, and a few other factors are considered. Your score is calculated from both the good and the bad in your credit history. Late payments lower your credit score, but consistently making future payments on time will improve your score.

To get a credit score, you 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 credit to build an accurate score. Some people don't have a long enough credit history to get a credit score. They should build up credit history before they apply.

Executive Lending Group can answer questions about credit reports and many others. Give us a call: 4056158543.