Credit Scores

Before lenders decide to give you a loan, they have to know that you are willing and able to repay that mortgage. To figure out your ability to repay, they assess your debt-to-income ratio. In order to calculate your willingness to pay back the loan, they look at your credit score.

Fair Isaac and Company calculated the first FICO score to assess creditworthines. You can find out more on FICO here.

Credit scores only take into account the information contained in your credit profile. They do not take into account income, savings, down payment amount, or personal factors like sex ethnicity, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was invented as a way to consider only that which was relevant to a borrower's willingness to repay a loan.

Your current debt load, past late payments, length of your credit history, and a few other factors are considered. Your score is based on both the good and the bad of 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 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 credit to assign a score. Some borrowers don't have a long enough credit history to get a credit score. They may need to build up credit history before they apply for a loan.

At HT Lending Group, LLC, we answer questions about Credit reports every day. Call us: 817-431-8618.