Credit Scoring

Before lenders make the decision to lend you money, they have to know if you are willing and able to repay that mortgage. To understand your ability to pay back the loan, they assess your income and debt ratio. To assess your willingness to repay, they use your credit score.

Fair Isaac and Company formulated the first FICO score to help lenders assess creditworthines. You can find out more on FICO here.

Your credit score comes from your repayment history. They never consider your income, savings, amount of down payment, or personal factors like gender, race, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to consider solely that which was relevant to a borrower's willingness to repay the lender.

Past delinquencies, 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 wtih both positive and negative information in your credit report. Late payments will lower your credit score, but consistently making future payments on time will raise your score.

To get a credit score, you must have an active credit account with at least six months of payment history. This payment history ensures that there is enough information in your credit to assign a score. Some people don't have a long enough credit history to get a credit score. They should spend a little time building credit history before they apply for a loan.

Metro Mortgage can answer questions about credit reports and many others. Give us a call: 866-300-1550.

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