Your Credit Score: What it means

Before lenders make the decision to give you a loan, they need to know that you're willing and able to repay that loan. To figure out your ability to pay back the loan, lenders look at your debt-to-income ratio. In order to calculate your willingness to pay back the mortgage loan, they consult your credit score.

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

Credit scores only consider the info contained in your credit profile. They do not consider your income, savings, amount of down payment, or demographic factors like sex ethnicity, nationality or marital status. These scores were invented specifically for this reason. Credit scoring was developed as a way to consider solely that which was relevant to a borrower's likelihood to repay a loan.

Past delinquencies, payment behavior, debt level, length of credit history, types of credit and the number of credit inquiries are all calculated into credit scoring. Your score is calculated from both the good and the bad of your credit report. Late payments will lower your credit 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 payment history ensures that there is enough information in your credit to assign a score. If you don't meet the criteria for getting a score, you may need to work on your credit history before you apply for a mortgage loan.

At CHASE MORTGAGE, Inc. #317430, we answer questions about Credit reports every day. Call us: 4357556622.