About Your Credit Score
Before lenders make the decision to lend you money, they want to know if you're willing and able to pay back that loan. To figure out your ability to repay, they look at your debt-to-income ratio. To assess how willing you are to repay, they use your credit score.
Fair Isaac and Company formulated the first FICO score to assess creditworthines. You can learn more about FICO here.
Credit scores only take into account the information in your credit profile. They don't consider your income, savings, down payment amount, or factors like sex race, nationality or marital status. Fair Isaac invented FICO specifically to exclude demographic factors. Credit scoring was developed to assess a borrower's willingness to pay while specifically excluding any other irrelevant factors.
Your current debt load, past late payments, length of your credit history, and other factors are considered. Your score considers positive and negative items in your credit report. Late payments count against your score, but a consistent record of paying on time will improve it.
For the agencies to calculate a credit score, borrowers must have an active credit account with a payment history of at least six months. This payment history ensures that there is sufficient information in your report to generate a score. Some borrowers don't have a long enough credit history to get a credit score. They should spend a little time building up a credit history before they apply for a loan.
At Metro Mortgage, we answer questions about Credit reports every day. Give us a call: 866-300-1550.