About Your Credit Score

Before lenders decide to give you a loan, they have to know if you are willing and able to repay that mortgage. To assess your ability to pay back the loan, they look at your income and debt ratio. In order to calculate your willingness to pay back the mortgage loan, they look at your credit score.

The most commonly used credit scores are FICO scores, which Fair Isaac & Company, a financial analytics agency, developed. The FICO score ranges from 350 (high risk) to 850 (low risk). For details on FICO, read more here.

Your credit score comes from your repayment history. They don't take into account income, savings, down payment amount, or factors like sex race, nationality or marital status. These scores were invented specifically for this reason. "Profiling" was as bad a word when these scores were invented as it is now. Credit scoring was envisioned as a way to assess willingness to pay while specifically excluding any other personal factors.

Your current debt load, past late payments, length of your credit history, and a few other factors are considered. Your score results from positive and negative information in your credit report. Late payments lower your score, but establishing or reestablishing a good track record of making payments on time will raise your score.

To get a credit score, you 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 build a score. Some people don't have a long enough credit history to get a credit score. They may need to build up credit history before they apply.

Greystone Loans, Inc. can answer your questions about credit reporting. Call us at 9094671090.