Credit Scores

Before they decide on the terms of your mortgage loan, lenders want to know two things about you: whether you can pay back the loan, and how committed you are to pay back the loan. To understand your ability to pay back the loan, they look at your income and debt ratio. To calculate your willingness to pay back the mortgage loan, they look at your credit score.

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

Credit scores only consider the info contained in your credit profile. They don't consider your income, savings, down payment amount, or personal factors like gender, ethnicity, national origin or marital status. These scores were invented specifically for this reason. "Profiling" was as bad a word when FICO scores were first invented as it is now. Credit scoring was envisioned as a way to assess a borrower's willingness to pay while specifically excluding other personal factors.

Your current debt level, past late payments, length of your credit history, and other factors are considered. Your score comes from the good and the bad in your credit report. Late payments count against your score, but a 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 six months. This payment history ensures that there is sufficient information in your report to calculate a score. Should you not meet the minimum criteria for getting a score, you may need to establish your credit history before you apply for a mortgage.

At The Elite Lending Team at Milestone Mortgage Corporation, we answer questions about Credit reports every day. Call us at 561-373-4149.


English French German Portuguese Spanish