Credit Scoring

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Before lenders decide to give you a loan, they want to know that you are willing and able to pay back that loan. To figure out your ability to repay, lenders look at your debt-to-income ratio. In order to calculate your willingness to pay back the loan, they consult your credit score.

Fair Isaac and Company built the first FICO score to assess creditworthines. You can learn more about FICO here.

Your credit score is a direct result of your repayment history. They don't consider your income, savings, amount of down payment, or personal factors like sex race, nationality or marital status. Fair Isaac invented FICO specifically to exclude demographic factors. 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 other factors are considered. Your score results from both positive and negative items in your credit report. Late payments will lower your score, but establishing or reestablishing a good track record of making payments on time will raise your score.

For the agencies to calculate 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 report to generate a score. Some people don't have a long enough credit history to get a credit score. They may need to spend a little time building up a credit history before they apply for a loan.

At WestStar Mortgage, we answer questions about Credit reports every day. Call us at 8167213752.