Credit Scores : Your Oceanside Mortgage Loan Professional : 516 536-2525

A Score that Really Matters: Your Credit Score

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Before they decide on the terms of your loan, lenders want to discover two things about you: whether you can repay the loan, and if you are willing to pay it back. To assess your ability to repay, they look at your debt-to-income ratio. In order to assess your willingness to pay back the mortgage loan, they look at your credit score.

Fair Isaac and Company developed the original FICO score to assess creditworthiness. We've written a lot more on FICO here.

Your credit score is a result of your repayment history. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors. "Profiling" was as bad a word when FICO scores were first invented as it is in the present day. Credit scoring was envisioned as a way to assess willingness to pay without considering any other demographic factors.

Deliquencies, payment behavior, current debt level, length of credit history, types of credit and the number of inquiries are all considered in credit scores. Your score is calculated with positive and negative items in your credit report. Late payments will lower your credit score, but consistently making future payments on time will improve your score.

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

G & M Wolkenberg Inc. can answer questions about credit reports and many others. Give us a call at 516 536-2525.