About Your Credit Score

Before lenders decide to give you a loan, they have to know that you are willing and able to repay that mortgage loan. To assess whether you can repay, they assess your income and debt ratio. To assess how willing you are to repay, they use your credit score.

The most widely 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). You can learn more about FICO here. For more information on high risk services you an learn more about high risk, here.

Credit scores only assess the info contained in your credit reports. They never consider income, savings, down payment amount, or factors like gender, ethnicity, nationality or marital status. These scores were invented specifically for this reason. "Profiling" was as dirty a word when FICO scores were invented as it is in the present day. Credit scoring was invented as a way to consider only that which was relevant to a borrower's likelihood to pay back the lender.

Your current debt load, past late payments, length of your credit history, and other factors are considered. Your score is calculated from both the good and the bad in your credit history. Late payments lower your score, but establishing or reestablishing a good track record of making payments on time will improve your score.

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