About Your Credit Score

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Before deciding on what terms they will offer you a loan, lenders want to know two things about you: your ability to repay the loan, and how committed you are to repay the loan. To understand your ability to repay, they assess your income and debt ratio. To assess your willingness to repay, they use your credit score.

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

Your credit score comes from your history of repayment. They do not consider your income, savings, down payment amount, or demographic factors like gender, ethnicity, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was invented as a way to consider solely what was relevant to a borrower's willingness to pay back the lender.

Deliquencies, payment behavior, current debt level, length of credit history, types of credit and number of inquiries are all considered in credit scores. Your score reflects both the good and the bad of your credit report. Late payments will lower your 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 sufficient information in your credit to generate an accurate 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.

At Commonwealth Mortgage & Investments, Inc., we answer questions about Credit reports every day. Call us at 8047689519.