About Your Credit Score
Before they decide on the terms of your mortgage loan, lenders must know two things about you: your ability to repay the loan, and how committed you are to repay the loan. To understand whether you can pay back the loan, they assess your income and debt ratio. To calculate your willingness to repay the mortgage loan, they look at your credit score.
Fair Isaac and Company developed the original FICO score to help lenders assess creditworthines. You can learn more about FICO here.
Credit scores only take into account the information contained in your credit reports. They don't consider income or personal characteristics. These scores were invented specifically for this reason. "Profiling" was as bad a word when these scores were first invented as it is in the present day. Credit scoring was developed to assess a borrower's willingness to repay the loan while specifically excluding other irrelevant factors.
Your current debt level, past late payments, length of your credit history, and a few other factors are considered. Your score reflects the good and the bad of your credit report. Late payments will lower your credit score, but consistently making future payments on time will raise your score.
Your credit report should 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 sufficient information in your report to build an accurate score. If you don't meet the criteria for getting a credit score, you might need to establish your credit history prior to applying for a mortgage.
Coleman Mortgage Company can answer your questions about credit reporting. Give us a call at 972-932-9083.