A Score that Really Matters: Your Credit Score

Before deciding on what terms they will offer you a loan, lenders want to discover two things about you: whether you can repay the loan, and if you are willing to pay it back. To assess your ability to pay back the loan, they look at your income and debt ratio. To calculate your willingness to repay the mortgage loan, they look at your credit score.
Fair Isaac and Company built the first FICO score to assess creditworthines. For details on FICO, read more here.
Credit scores only assess the information in your credit profile. They don't take into account income, savings, down payment amount, or factors like gender, ethnicity, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was invented as a way to consider solely what was relevant to a borrower's likelihood to repay the lender.
Deliquencies, derogatory payment behavior, debt level, length of credit history, types of credit and the number of credit inquiries are all calculated into credit scores. Your score is calculated wtih both positive and negative information in your credit report. Late payments count against your score, but a consistent 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 report to build a score. If you don't meet the minimum criteria for getting a credit score, you might need to work on your credit history prior to applying for a mortgage.
The Elite Lending Team at Milestone Mortgage Corporation
NMLS# 133260 can answer questions about credit reports and many others. Call us: 5613734149.