About Your Credit Score

Before lenders decide to give you a loan, they must know if you are willing and able to pay back that mortgage loan. To figure out your ability to pay back the loan, lenders look at your debt-to-income ratio. To calculate your willingness to repay the mortgage loan, they consult your credit score.

Fair Isaac and Company developed the first FICO score to assess creditworthines. We've written more about FICO here.

Credit scores only take into account the information in your credit reports. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was developed as a way to consider only that which was relevant to a borrower's willingness to pay back the lender.

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 in your credit history. Late payments will lower your score, but establishing or reestablishing a good track record of making payments on time will improve 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 history ensures that there is sufficient information in your credit to generate a score. Should you not meet the minimum criteria for getting a score, you might need to establish your credit history prior to applying for a mortgage.

Hometown Financial Services can answer questions about credit reports and many others. Give us a call: (772) 252-6724.