Your Credit Score: What it means

Before deciding on what terms they will offer you a mortgage loan, lenders want to discover two things about you: your ability to repay the loan, and how committed you are to repay the loan. To assess your ability to repay, they look at your income and debt ratio. To calculate your willingness to repay the mortgage loan, they consult your credit score.

Fair Isaac and Company built the first FICO score to assess creditworthines. You can learn 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. "Profiling" was as bad a word when FICO scores were invented as it is today. Credit scoring was envisioned as a way to assess willingness to pay without considering any other demographic factors.

Your current debt level, past late payments, length of your credit history, and other factors are considered. Your score results from positive and negative items in your credit report. Late payments count against your score, but a consistent record of paying on time will raise it.

Your credit report must have at least one account which has been open for six months or more, and at least one account that has been updated in the past six months for you to get a credit score. This payment history ensures that there is sufficient information in your report to assign a score. Some borrowers don't have a long enough credit history to get a credit score. They should build up a credit history before they apply.

U.S.A. Lending, Inc. can answer your questions about credit reporting. Give us a call at 305-967-7200.