About Your Credit Score

Before they decide on the terms of your mortgage loan, lenders must discover two things about you: your ability to repay the loan, and if you are willing to pay it back. To assess whether you can repay, they assess your income and debt ratio. To assess how willing you are to repay, they use your credit score.

Fair Isaac and Company formulated the original FICO score to help lenders assess creditworthines. For details on FICO, read more here.

Your credit score is a result of your history of repayment. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was developed to assess willingness to repay the loan without considering any other personal factors.

Past delinquencies, derogatory payment behavior, current debt level, length of credit history, types of credit and number of credit inquiries are all considered in credit scoring. Your score considers positive and negative items in your credit report. Late payments will lower your score, but establishing or reestablishing a good track record of making payments on time will raise your score.

Your 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 payment history ensures that there is sufficient information in your report to assign a score. If you don't meet the criteria for getting a score, you might need to work on a credit history prior to applying for a mortgage.

Community Trust Lending Team at Norcom Mortgage-NMLS ID#71655 can answer questions about credit reports and many others. Call us at (203) 526-9345.


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