About Your Credit Score

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Before they decide on the terms of your mortgage loan (which they base on their risk), lenders need to know two things about you: your ability to pay back the loan, and how committed you are to pay back the loan. To assess whether you can pay back the loan, they look at your income and debt ratio. To assess your willingness to repay, they use your credit score.

Fair Isaac and Company built the first FICO score to assess creditworthiness. For details on FICO, read more here.

Your credit score is a direct result of your history of repayment. 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 invented as it is today. Credit scoring was developed as a way to consider only what was relevant to a borrower's likelihood to repay a loan.

Your current debt level, past late payments, length of your credit history, and a few other factors are considered. Your score reflects the good and the bad of your credit history. Late payments will lower your credit score, but establishing or reestablishing a good track record of making payments on time will raise your score.

For the agencies to calculate a credit score, you must have an active credit account with six months of payment history. This history ensures that there is sufficient information in your report to build a score. Some folks don't have a long enough credit history to get a credit score. They should spend some time building up a credit history before they apply.

At dbl mortgage, LLC, we answer questions about Credit reports every day. Call us at 612-749-4914.