Credit Scoring

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

Fair Isaac and Company developed the original FICO score to assess creditworthines. For details on FICO, read more here.

Credit scores only take into account the info contained in your credit profile. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors. Credit scoring was invented as a way to take into account solely that which was relevant to a borrower's likelihood to pay back the lender.

Deliquencies, derogatory payment behavior, debt level, length of credit history, types of credit and the number of inquiries are all calculated into credit scoring. Your score is calculated from the good and the bad in your credit report. Late payments lower your score, but establishing or reestablishing a good track record of making payments on time will improve your score.

To get a credit score, borrowers must have an active credit account with a payment history of at least six months. This history ensures that there is sufficient information in your report to assign a score. Some people don't have a long enough credit history to get a credit score. They may need to build up credit history before they apply for a loan.

At Financial Edge Mortgage Corp., we answer questions about Credit reports every day. Give us a call: 425-508-9988.