About Your Credit Score

Before lenders decide to lend you money, they have to know that you are willing and able to repay that mortgage loan. To assess your ability to repay, they assess your income and debt ratio. To calculate your willingness to repay the loan, they look at your credit score.

Fair Isaac and Company built the original FICO score to help lenders assess creditworthines. We've written more on FICO here.

Credit scores only consider the info in your credit profile. They never consider income, savings, amount of down payment, or demographic factors like sex race, national origin or marital status. Fair Isaac invented FICO specifically to exclude demographic factors. "Profiling" was as bad a word when FICO scores were first invented as it is now. Credit scoring was developed to assess a borrower's willingness to pay without considering other personal factors.

Your current debt level, past late payments, length of your credit history, and a few other factors are considered. Your score results from positive and negative items in your credit report. Late payments count against you, 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 history ensures that there is sufficient information in your report to build a score. Some people don't have a long enough credit history to get a credit score. They should build up credit history before they apply.

Pacific Loan Brokers can answer questions about credit reports and many others. Give us a call at 877-310-6200.

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