A Score that Really Matters: Your Credit Score
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Before lenders decide to give you a loan, they need to know if you're willing and able to pay back that loan. To understand your ability to pay back the loan, they assess your income and debt ratio. In order 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 assess creditworthiness. We've written a lot more on FICO here.
Your credit score is a direct result of your repayment history. They don't consider your income, savings, down payment amount, or factors like sex ethnicity, national origin or marital status. Fair Isaac invented FICO specifically to exclude demographic factors like these. Credit scoring was developed as a way to take into account solely what was relevant to a borrower's willingness to pay back the lender.
Your current debt level, past late payments, length of your credit history, and a few other factors are considered. Your score comes from both the good and the bad in your credit history. Late payments lower your credit score, but establishing or reestablishing a good track record of making payments on time will raise your score.
Your report must 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 generate an accurate score. Should you not meet the criteria for getting a score, you may need to establish your credit history before you apply for a mortgage loan.