About Your Credit Score

Before lenders decide to give you a loan, they want to know that you are willing and able to pay back that loan. To understand whether you can pay back the loan, they look at your income and debt ratio. In order to calculate your willingness to pay back the mortgage loan, they look at your credit score.

Fair Isaac and Company calculated the original FICO score to assess creditworthines. You can learn 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. These scores were invented specifically for this reason. "Profiling" was as bad a word when FICO scores were invented as it is in the present day. Credit scoring was invented as a way to consider solely what was relevant to a borrower's likelihood to pay back a loan.

Your current debt level, past late payments, length of your credit history, and a few other factors are considered. Your score considers positive and negative items in your credit report. Late payments lower your score, but consistently making future payments on time will raise your score.

Your report must contain 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 report to assign a score. Some folks don't have a long enough credit history to get a credit score. They should build up a credit history before they apply for a loan.

Community Trust Lending Team at Norcom Mortgage-NMLS ID#71655 can answer your questions about credit reporting. Give us a call: (203) 526-9345.