Your Credit Score: What it means

Before lenders make the decision to give you a loan, they have to know if you're willing and able to repay that mortgage. To assess 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.

Fair Isaac and Company formulated the original FICO score to help lenders assess creditworthines. You can learn more on FICO here.

Your credit score is a result of your repayment history. They do not consider income, savings, amount of down payment, or personal factors like sex race, nationality or marital status. Fair Isaac invented FICO specifically to exclude demographic factors like these. "Profiling" was as bad a word when these scores were first invented as it is today. Credit scoring was envisioned as a way to assess willingness to pay while specifically excluding any other irrelevant factors.

Past delinquencies, derogatory payment behavior, current debt level, length of credit history, types of credit and number of inquiries are all considered in credit scoring. Your score results from both positive and negative items in your credit report. Late payments count against you, but a 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 credit to calculate a score. Some folks don't have a long enough credit history to get a credit score. They may need to spend some time building up credit history before they apply.

CHASE MORTGAGE, Inc. #317430 can answer questions about credit reports and many others. Give us a call at 4357556622.