Credit Scoring

Before lenders decide to give you a loan, they need to know if you're willing and able to repay that loan. To assess whether you can repay, they assess your income and debt ratio. In order to calculate your willingness to repay the loan, they consult your credit score.

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

Credit scores only assess the info in your credit reports. They never consider your income, savings, amount of down payment, or demographic factors like sex race, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to assess a borrower's willingness to pay while specifically excluding any other personal factors.

Your current debt level, past late payments, length of your credit history, and other factors are considered. Your score reflects both the good and the bad in your credit history. Late payments count against your score, but a consistent record of paying on time will improve it.

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 enough information in your credit to build an accurate score. Some people don't have a long enough credit history to get a credit score. They should build up a credit history before they apply for a loan.

Metro Mortgage can answer your questions about credit reporting. Give us a call: 866-300-1550.