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 if you will pay it back. To understand your ability to pay back the loan, they assess your income and debt ratio. In order to assess your willingness to pay back the loan, they consult your credit score.

The most widely used credit scores are called FICO scores, which were developed by Fair Isaac & Company, Inc. Your FICO score ranges from 350 (very high risk) to 850 (low risk). You can find out more about FICO here.

Credit scores only assess the info contained in your credit profile. They do not consider income, savings, down payment amount, or demographic factors like gender, race, national origin or marital status. These scores were invented specifically for this reason. "Profiling" was as bad a word when FICO scores were invented as it is in the present day. Credit scoring was developed as a way to take into account only that which was relevant to a borrower's willingness to repay the lender.

Your current debt load, past late payments, length of your credit history, and a few other factors are considered. Your score is calculated wtih positive and negative items in your credit report. Late payments count against your score, but a record of paying on time will improve it.

To get a credit score, borrowers must have an active credit account with a payment history of at least six months. This history ensures that there is enough information in your credit to assign a score. Some people don't have a long enough credit history to get a credit score. They should spend a little time building up credit history before they apply.

Executive Lending Group, LLC can answer your questions about credit reporting. Call us at (816) 525-8000 & (81.

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