Credit Scoring

Before lenders decide to give you a loan, they want to know that you are willing and able to pay back that mortgage. To assess your ability to repay, they assess your income and debt ratio. To assess your willingness to repay, they use your credit score.

Fair Isaac and Company calculated the original FICO score to assess creditworthines. You can find out more about FICO here.

Your credit score is a direct result of your history of repayment. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to assess a borrower's willingness to repay the loan while specifically excluding any other irrelevant factors.

Past delinquencies, derogatory payment behavior, debt level, length of credit history, types of credit and the number of inquiries are all calculated into credit scoring. Your score reflects the good and the bad in your credit report. Late payments lower your score, but consistently making future payments on time will raise your score.

To get a credit score, borrowers must have an active credit account with at least six months of payment history. This payment history ensures that there is sufficient information in your credit to calculate an accurate score. If you don't meet the minimum criteria for getting a credit score, you might need to establish your credit history before you apply for a mortgage loan.

At The Elite Lending Team at Milestone Mortgage Corporation
NMLS# 133260, we answer questions about Credit reports every day. Give us a call at 5613734149.