A Score that Really Matters: Your Credit Score
Before lenders make the decision to give you a loan, they want to know that you're willing and able to pay back that loan. To assess whether you can pay back the loan, they look at your income and debt ratio. To assess how willing you are to repay, they use your credit score.
Fair Isaac and Company formulated the original FICO score to help lenders assess creditworthines. You can learn more about FICO here.
Credit scores only consider the info contained in your credit profile. They don't consider income or personal characteristics. These scores were invented specifically for this reason. "Profiling" was as dirty a word when these scores were invented as it is in the present day. Credit scoring was developed to assess a borrower's willingness to repay the loan without considering other irrelevant factors.
Your current debt level, past late payments, length of your credit history, and other factors are considered. Your score is calculated wtih both positive and negative information in your credit report. Late payments count against your score, but a record of paying on time will raise it.
To get a credit score, you must have an active credit account with a payment history of six months. This history ensures that there is sufficient information in your credit to generate a score. Should you not meet the minimum criteria for getting a score, you might need to work on your credit history before you apply for a mortgage loan.
Saab Mortgage can answer your questions about credit reporting. Give us a call at 7032880777.