Credit Scores

Before they decide on the terms of your loan (which they base on their risk), lenders want to know two things about you: your ability to pay back the loan, and your willingness to repay the loan. To figure out your ability to repay, they look at your debt-to-income ratio. To assess your willingness to repay, they use your credit score.

Fair Isaac and Company calculated the first FICO score to help lenders assess creditworthines. We've written more on FICO here.

Credit scores only consider the information contained in your credit profile. They do not consider income, savings, down payment amount, or factors like gender, ethnicity, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was developed to assess willingness to repay the loan while specifically excluding any other demographic factors.

Your current debt load, past late payments, length of your credit history, and other factors are considered. Your score is calculated from both the good and the bad in your credit history. Late payments lower your score, but establishing or reestablishing a good track record of making payments on time will improve your score.

Your credit report should 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 history ensures that there is sufficient information in your report to generate a score. Some folks don't have a long enough credit history to get a credit score. They may need to spend a little time building up credit history before they apply.

U.S.A. Lending, Inc. can answer questions about credit reports and many others. Call us at 305-967-7200.