About Your Credit Score

Before lenders make the decision to give you a loan, they must know if you are willing and able to repay that loan. To assess your ability to repay, lenders look at your debt-to-income ratio. In order to calculate your willingness to repay the mortgage loan, they consult your credit score.

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

Credit scores only assess the info contained in your credit profile. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors like these. Credit scoring was developed as a way to take into account 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 considers both positive and negative items in your credit report. Late payments count against your score, but a record of paying on time will raise it.

Your 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 payment history ensures that there is enough information in your report to assign an accurate score. If you don't meet the minimum criteria for getting a score, you may need to work on your credit history prior to applying for a mortgage.

At Southwest Funding #841
Company NMLS # 303440, we answer questions about Credit reports every day. Call us at 5122916100.