A Score that Really Matters: Your Credit Score
|In the market for a new mortgage loan? I'd be thrilled to discuss our many mortgage solutions! Call me at 612.816.1511. Ready to get started? Apply Now.|
Before lenders decide to give you a loan, they have to know that you're willing and able to repay that mortgage. To understand your ability to repay, they look at your income and debt ratio. In order to calculate your willingness to pay back the mortgage loan, they consult your credit score.
Fair Isaac and Company formulated the original FICO score to assess creditworthiness. You can learn more on FICO here.
Credit scores only take into account the information in your credit profile. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to assess willingness to repay the loan while specifically excluding other demographic factors.
Your current debt level, past late payments, length of your credit history, and other factors are considered. Your score is based on the good and the bad in your credit report. Late payments will lower your score, but consistently making future 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 history ensures that there is sufficient information in your credit to calculate an accurate score. Some folks don't have a long enough credit history to get a credit score. They should spend some time building credit history before they apply for a loan.