About Your Credit Score

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

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

Credit scores only consider the info contained in your credit profile. They never take into account your income, savings, down payment amount, or factors like gender, race, national origin or marital status. Fair Isaac invented FICO specifically to exclude demographic factors. "Profiling" was as bad a word when FICO scores were first invented as it is today. Credit scoring was envisioned as a way to take into account solely that which was relevant to a borrower's likelihood 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 from both the good and the bad in your credit report. Late payments count against you, but a consistent record of paying on time will raise it.

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

Southwest Funding #841
Company NMLS # 303440 can answer questions about credit reports and many others. Give us a call at 5122916100.