About Your Credit Score

Before they decide on the terms of your mortgage loan, lenders want to know two things about you: your ability to pay back the loan, and if you are willing to pay it back. To assess your ability to pay back the loan, they assess your debt-to-income ratio. To assess how willing you are to repay, they use your credit score.

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

Credit scores only assess the info contained in your credit reports. They don't take into account income, savings, amount of down payment, or demographic factors like gender, ethnicity, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was developed to assess willingness to pay without considering other personal factors.

Your current debt level, past late payments, length of your credit history, and other factors are considered. Your score results from positive and negative items in your credit report. Late payments count against you, but a consistent record of paying on time will raise it.

To get a credit score, borrowers must have an active credit account with a payment history of at least six months. This history ensures that there is enough information in your credit to calculate an accurate score. Should you not meet the criteria for getting a credit score, you may need to work on your credit history prior to applying for a mortgage loan.

At United Capital Mortgage, Inc., we answer questions about Credit reports every day. Call us at 2147187183.