About Your Credit Score
Before lenders make the decision to lend you money, they want to know that you are willing and able to repay that mortgage loan. To figure out your ability to pay back the loan, they look at your debt-to-income ratio. To assess your willingness to repay the loan, they look at your credit score.
Fair Isaac and Company built the first FICO score to help lenders assess creditworthines. We've written more about FICO here.
Your credit score is a result of your history of repayment. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors. Credit scoring was developed as a way to consider solely that which was relevant to a borrower's willingness to repay the lender.
Your current debt level, past late payments, length of your credit history, and other factors are considered. Your score results from both positive and negative items in your credit report. Late payments count against you, but a record of paying on time will improve it.
For the agencies to calculate a credit score, you must have an active credit account with a payment history of six months. This history ensures that there is enough information in your report 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.
Quick Quote Mortgage Inc can answer your questions about credit reporting. Give us a call at 8136572427.