About Your Credit Score

Before lenders decide to give you a loan, they want to know that you're willing and able to pay back that loan. To figure out your ability to pay back the loan, lenders look at your debt-to-income ratio. To assess your willingness to repay, they use your credit score.

The most commonly used credit scores are called FICO scores, which were developed by Fair Isaac & Company, Inc. The FICO score ranges from 350 (very high risk) to 850 (low risk). You can find out more on FICO here.

Your credit score is a result of your history of repayment. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was developed to assess willingness to pay while specifically excluding other irrelevant factors.

Deliquencies, derogatory payment behavior, current debt level, length of credit history, types of credit and the number of inquiries are all calculated into credit scores. Your score is calculated from the good and the bad in your credit history. Late payments lower your credit score, but consistently making future payments on time will improve your score.

Your 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 enough information in your credit to calculate a score. If you don't meet the minimum criteria for getting a score, you might need to work on a credit history before you apply for a mortgage.

U.S.A. Lending, Inc. can answer questions about credit reports and many others. Give us a call: 305-967-7200.