About Your Credit Score

Before lenders decide to give you a loan, they want to know if you are willing and able to repay that loan. To assess whether you can pay back the loan, they assess your income and debt ratio. To calculate your willingness to repay the mortgage loan, they look at your credit score.

Fair Isaac and Company developed the original FICO score to help lenders assess creditworthines. You can find out more on FICO here.

Credit scores only take into account the information contained in your credit reports. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors. "Profiling" was as dirty a word when these scores were first invented as it is in the present day. Credit scoring was envisioned as a way to assess a borrower's willingness to pay without considering any other personal factors.

Your current debt load, past late payments, length of your credit history, and other factors are considered. Your score is based on the good and the bad of your credit report. Late payments count against your score, but a consistent record of paying on time will improve it.

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 enough information in your credit to calculate an accurate score. Some people don't have a long enough credit history to get a credit score. They may need to build up a credit history before they apply.

At MidTowne Mortgage, we answer questions about Credit reports every day. Give us a call at (478) 746-2063.

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