About Your Credit Score

Before lenders decide to lend you money, they want to know that you are willing and able to repay that mortgage. To assess your ability to pay back the loan, they assess your debt-to-income ratio. To assess how willing you are to repay, they use your credit score.

The most widely used credit scores are FICO scores, which were developed by Fair Isaac & Company, Inc. Your FICO score ranges from 350 (high risk) to 850 (low risk). For details on FICO, read more here.

Your credit score is a result of your repayment history. They don't consider your income, savings, down payment amount, or factors like gender, race, nationality or marital status. Fair Isaac invented FICO specifically to exclude demographic factors like these. Credit scoring was envisioned as a way to assess willingness to pay without considering any other irrelevant factors.

Past delinquencies, payment behavior, current debt level, length of credit history, types of credit and the number of credit inquiries are all calculated into credit scores. Your score considers both positive and negative information in your credit report. Late payments lower your credit score, but establishing or reestablishing a good track record of making payments on time will improve your score.

To get a credit score, you must have an active credit account with six months of payment history. This payment history ensures that there is enough information in your credit to assign a score. Some borrowers don't have a long enough credit history to get a credit score. They should build up credit history before they apply.

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