Credit Scoring

Before lenders make the decision to give you a loan, they need to know if you are willing and able to repay that mortgage loan. To figure out your ability to repay, lenders 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 first FICO score to assess creditworthines. For details on FICO, read more here.

Credit scores only assess the information in your credit profile. They don't consider your income, savings, down payment amount, or personal factors like gender, race, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was developed as a way to consider only that which was relevant to a borrower's willingness to repay a loan.

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

Your credit 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 history ensures that there is enough information in your report to assign a score. If you don't meet the minimum criteria for getting a score, you might need to establish your credit history before you apply for a mortgage loan.

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