Your Credit Score: What it means

Before lenders decide to lend you money, they have to know if you're willing and able to repay that mortgage loan. To understand your ability to pay back the loan, they assess your income and debt ratio. To calculate your willingness to pay back the loan, they consult your credit score.

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

Your credit score is a result of your repayment history. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors like these. Credit scoring was developed to assess willingness to pay while specifically excluding any other demographic factors.

Past delinquencies, payment behavior, debt level, length of credit history, types of credit and number of inquiries are all calculated into credit scores. Your score reflects both the good and the bad in your credit history. Late payments count against you, but a record of paying on time will improve it.

Your report must have 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 calculate an accurate score. Some borrowers don't have a long enough credit history to get a credit score. They may need to spend a little time building credit history before they apply for a loan.

Not Your Average Lender can answer questions about credit reports and many others. Give us a call at 9722039033.