A Score that Really Matters: Your Credit Score

Before lenders make the decision to lend you money, they have to know that you are willing and able to pay back that loan. To understand your ability to repay, they look at your income and debt ratio. To assess your willingness to repay the mortgage loan, they consult your credit score.

Fair Isaac and Company built the first FICO score to help lenders assess creditworthines. You can find out more on FICO here.

Credit scores only assess the info contained in your credit profile. They don't consider income, savings, down payment amount, or demographic factors like gender, ethnicity, nationality or marital status. These scores were invented specifically for this reason. "Profiling" was as bad a word when FICO scores were first invented as it is in the present day. Credit scoring was envisioned as a way to assess a borrower's willingness to repay the loan without considering any other demographic factors.

Deliquencies, derogatory payment behavior, debt level, length of credit history, types of credit and the number of credit inquiries are all considered in credit scoring. Your score is calculated from the good and the bad in your credit history. Late payments count against your score, but a record of paying on time will improve it.

Your report should contain 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 build up a credit history before they apply for a loan.

At Marc Moser / NMLS# 232625 , we answer questions about Credit reports every day. Give us a call at 7274664301.

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Marc Moser / NMLS# 232625

Licensed in Florida

2451 N. McMullen Booth Rd. Ste. 306
Clearwater, FL 33759