About Your Credit Score

Before lenders make the decision to lend you money, they must know that you are willing and able to repay that mortgage. To assess your ability to repay, lenders look at your debt-to-income ratio. To assess your willingness to repay, they use your credit score.

The most widely used credit scores are called FICO scores, which Fair Isaac & Company, a financial analytics agency, developed. The FICO score ranges from 350 (high risk) to 850 (low risk). For details on FICO, read more here.

Your credit score comes from your history of repayment. 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 first invented as it is in the present day. Credit scoring was envisioned as a way to assess a borrower's willingness to pay while specifically excluding any other demographic factors.

Past delinquencies, payment behavior, current debt level, length of credit history, types of credit and number of inquiries are all calculated into credit scoring. Your score results from positive and negative information in your credit report. Late payments count against you, but a consistent record of paying on time will raise it.

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 report to generate a score. Some people don't have a long enough credit history to get a credit score. They should spend a little time building a credit history before they apply.

At U.S.A. Lending, Inc., we answer questions about Credit reports every day. Give us a call: 305-967-7200.