About Your Credit Score

Before deciding on what terms they will offer you a loan, lenders must find out two things about you: your ability to repay the loan, and if you will pay it back. To assess your ability to repay, lenders assess your debt-to-income 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. We've written more on FICO here.

Your credit score comes from your history of repayment. They don't take into account income, savings, amount of down payment, or personal factors like gender, race, nationality or marital status. Fair Isaac invented FICO specifically to exclude demographic factors. Credit scoring was developed as a way to consider solely that which was relevant to a borrower's willingness to repay a loan.

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

To get a credit score, you 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 calculate an accurate score. Some borrowers don't have a long enough credit history to get a credit score. They should spend a little time building a credit history before they apply for a loan.

Wize Mortgage LLC can answer questions about credit reports and many others. Give us a call at .