About Your Credit Score
Before lenders decide to give you a loan, they need to know that you are willing and able to pay back that loan. To understand your ability to repay, they assess your income and debt ratio. In order to calculate your willingness to repay the mortgage loan, they consult your credit score.
Fair Isaac and Company calculated the first FICO score to assess creditworthines. You can learn more on FICO here.
Your credit score is a direct result of your repayment history. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to assess 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 considers both positive and negative information in your credit report. Late payments lower your credit score, but establishing or reestablishing a good track record of making payments on time will raise 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 report to assign an accurate score. Some borrowers don't have a long enough credit history to get a credit score. They should spend some time building credit history before they apply for a loan.
Test can answer your questions about credit reporting. Give us a call: 4054206125.