A Score that Really Matters: Your Credit Score

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

Fair Isaac and Company calculated the first FICO score to help lenders assess creditworthines. You can learn more about FICO here.

Your credit score comes from your repayment history. They don't consider income or personal characteristics. These scores were invented specifically for this reason. "Profiling" was as bad a word when these scores were first invented as it is today. Credit scoring was developed to assess willingness to repay the loan without considering any other personal factors.

Past delinquencies, payment behavior, debt level, length of credit history, types of credit and the number of inquiries are all considered in credit scores. Your score is calculated from the good and the bad in your credit report. Late payments count against your score, but a consistent record of paying on time will raise it.

For the agencies to calculate a credit score, borrowers must have an active credit account with at least six months of payment history. This payment history ensures that there is enough information in your credit to generate a score. If you don't meet the minimum criteria for getting a credit score, you might need to work on your credit history prior to applying for a mortgage loan.

At Wize Mortgage LLC, we answer questions about Credit reports every day. Call us: .