About Your Credit Score
Before lenders make the decision to lend you money, they want to know that you are willing and able to repay that loan. To figure out your ability to pay back the loan, they look at your debt-to-income ratio. To assess how willing you are to repay, they use your credit score.
Fair Isaac and Company calculated the original FICO score to assess creditworthines. You can learn more on FICO here.
Credit scores only assess the information contained in your credit profile. They never consider your income, savings, down payment amount, or factors like sex race, national origin or marital status. Fair Isaac invented FICO specifically to exclude demographic factors like these. Credit scoring was envisioned as a way to consider only that which was relevant to a borrower's likelihood to repay a loan.
Your current debt level, past late payments, length of your credit history, and other factors are considered. Your score comes from both the good and the bad in your credit report. Late payments will lower your score, but consistently making future payments on time will raise your score.
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 history ensures that there is sufficient information in your credit to assign an accurate score. If you don't meet the criteria for getting a credit score, you might need to work on a credit history before you apply for a mortgage loan.
At Executive Lending Group, LLC, we answer questions about Credit reports every day. Call us: (816) 525-8000 & (81.
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