Credit Scores

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

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

Credit scores only consider the information contained in your credit profile. They do not consider income, savings, amount of down payment, or personal factors like sex race, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to consider solely that which was relevant to a borrower's willingness to pay back the lender.

Your current debt level, past late payments, length of your credit history, and a few other factors are considered. Your score results from positive and negative items in your credit report. Late payments lower your score, but establishing or reestablishing a good track record of making payments on time will improve your score.

To get a credit score, borrowers must have an active credit account with at least six months of payment history. This history ensures that there is enough information in your report to calculate an accurate score. Should you not meet the minimum criteria for getting a credit score, you might need to establish your credit history prior to applying for a mortgage loan.

Marshall Lending can answer your questions about credit reporting. Give us a call at 9162758775.