Your Credit Score: What it means

Before lenders decide to give you a loan, they want to know that you're willing and able to repay that mortgage. To assess your ability to repay, they assess your debt-to-income ratio. To assess your willingness to pay back the mortgage loan, they look at your credit score.

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

Credit scores only assess the information in your credit profile. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to assess a borrower's willingness to pay without considering other irrelevant factors.

Your current debt load, past late payments, length of your credit history, and other factors are considered. Your score considers 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.

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

At Executive Lending Group, we answer questions about Credit reports every day. Give us a call at 4056158543.