About Your Credit Score
Before lenders decide to lend you money, they have to know if you're willing and able to pay back that loan. To assess whether you can pay back the loan, they assess your income and debt ratio. In order to assess your willingness to pay back the loan, they consult your credit score.
Fair Isaac and Company developed the first FICO score to help lenders assess creditworthines. For details on FICO, read more here.
Credit scores only assess the information contained in your credit profile. They don't consider income or personal characteristics. These scores were invented specifically for this reason. "Profiling" was as bad a word when these scores were first invented as it is today. Credit scoring was envisioned as a way to assess willingness to pay without considering other demographic factors.
Your current debt level, past late payments, length of your credit history, and a few other factors are considered. Your score results from both positive and negative items in your credit report. Late payments count against your score, but a record of paying on time will improve it.
For the agencies to calculate a credit score, borrowers must have an active credit account with a payment history of at least six months. This payment history ensures that there is sufficient information in your credit to build a score. If you don't meet the criteria for getting a score, you may need to work on your credit history prior to applying for a mortgage.
At Bright Vision Mortgage, we answer questions about Credit reports every day. Give us a call: (904) 342-3622.