About Your Credit Score

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Before lenders make the decision to give you a loan, they must know that you are willing and able to repay that mortgage loan. To assess your ability to repay, lenders assess your debt-to-income ratio. To assess your willingness to repay, they use your credit score.

Fair Isaac and Company developed the original 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 reports. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors like these. Credit scoring was envisioned as a way to assess a borrower's willingness to pay without considering any other demographic factors.

Past delinquencies, derogatory payment behavior, debt level, length of credit history, types of credit and number of inquiries are all calculated into credit scoring. Your score is calculated wtih both positive and negative items in your credit report. Late payments lower your score, but consistently making future 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 payment history ensures that there is sufficient information in your credit to build a score. Should you not meet the minimum criteria for getting a credit score, you may need to work on a credit history prior to applying for a mortgage loan.

Primary Residential Mortgage, Inc can answer questions about credit reports and many others. Give us a call at 802-253-2055.