Your Credit Score: What it means

Before lenders decide to lend you money, they want to know if you are willing and able to pay back that mortgage loan. To assess your ability to pay back the loan, lenders look at your debt-to-income ratio. To assess how willing you are to repay, they use your credit score.

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

Your credit score is a direct result of your history of repayment. They don't consider your income, savings, amount of down payment, or demographic factors like gender, race, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was developed to assess a borrower's willingness to pay while specifically excluding other irrelevant factors.

Your current debt load, past late payments, length of your credit history, and other factors are considered. Your score comes from the good and the bad in your credit report. Late payments will lower your score, but establishing or reestablishing a good track record of making payments on time will improve your score.

Your credit report should 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 enough information in your report to calculate an accurate 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.

At Community Trust Lending Team at Norcom Mortgage-NMLS ID#71655, we answer questions about Credit reports every day. Give us a call at (203) 526-9345.


English French German Portuguese Spanish