About Your Credit Score

Before lenders decide to lend you money, they want to know if you're willing and able to pay back that mortgage loan. To assess your ability to pay back the loan, they look at your debt-to-income ratio. To calculate your willingness to repay the loan, they consult your credit score.

Fair Isaac and Company calculated the original FICO score to help lenders assess creditworthines. For details on FICO, read more here.

Credit scores only consider the information in your credit profile. They do not take into account your income, savings, amount of down payment, or factors like gender, race, nationality or marital status. These scores were invented specifically for this reason. Credit scoring was invented as a way to take into account solely what was relevant to a borrower's willingness to pay back the lender.

Deliquencies, payment behavior, current debt level, length of credit history, types of credit and the number of credit inquiries are all calculated into credit scores. Your score results from both positive and negative items in your credit report. Late payments count against you, but a record of paying on time will improve it.

To get 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 enough information in your report to generate an accurate score. Should you not meet the criteria for getting a score, you might need to work on a credit history before you apply for a mortgage loan.

North American Financial can answer your questions about credit reporting. Give us a call at 702-524-1376.