Credit Scores

Before lenders decide to give you a loan, they need to know that you're willing and able to pay back that mortgage. To understand whether you can repay, they assess your income and debt 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.

Your credit score comes from your repayment history. They never consider income, savings, down payment amount, or demographic factors like sex ethnicity, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to consider solely what was relevant to a borrower's likelihood to pay back a loan.

Your current debt load, past late payments, length of your credit history, and a few other factors are considered. Your score reflects both the good and the bad of your credit history. Late payments count against you, but a consistent record of paying on time will improve it.

Your credit report should have 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 build an accurate score. Some people don't have a long enough credit history to get a credit score. They may need to spend some time building a credit history before they apply.

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