About Your Credit Score

Before lenders make the decision to give you a loan, they need to know if you're willing and able to repay that mortgage loan. To understand your ability to pay back the loan, they look at your income and debt ratio. To assess your willingness to repay, they use your credit score.

Fair Isaac and Company developed the original FICO score to assess creditworthines. You can find out more on FICO here.

Credit scores only assess the information in your credit profile. They never consider income, savings, amount of down payment, or demographic factors like gender, ethnicity, nationality or marital status. Fair Isaac invented FICO specifically to exclude demographic factors like these. "Profiling" was as bad a word when these scores were 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 while specifically excluding other irrelevant factors.

Deliquencies, payment behavior, debt level, length of credit history, types of credit and number of credit inquiries are all calculated into credit scores. Your score is based on the good and the bad in your credit report. Late payments lower your credit score, but establishing or reestablishing a good track record of making payments on time will raise your score.

For the agencies to calculate a credit score, borrowers must have an active credit account with a payment history of at least six months. This history ensures that there is sufficient information in your credit to calculate a score. Should you not meet the criteria for getting a credit score, you may need to establish a credit history before you apply for a mortgage.

At Foxfield Financial, we answer questions about Credit reports every day. Call us at 7205988300.