About Your Credit Score
Before they decide on the terms of your loan, lenders must find out two things about you: your ability to repay the loan, and your willingness to pay back the loan. To assess whether you can pay back the loan, they assess your income and debt ratio. To assess how willing you are to repay, they use your credit score.
Fair Isaac and Company built the first FICO score to assess creditworthines. For details on FICO, read more here.
Your credit score is a result of your history of repayment. They don't consider income or personal characteristics. These scores were invented specifically for this reason. "Profiling" was as bad a word when FICO scores were invented as it is now. Credit scoring was developed to assess a borrower's willingness to pay while specifically excluding other irrelevant factors.
Past delinquencies, payment behavior, debt level, length of credit history, types of credit and number of inquiries are all considered in credit scoring. Your score reflects the good and the bad of your credit report. Late payments count against you, but a consistent record of paying on time will raise it.
For the agencies to calculate a credit score, you must have an active credit account with a payment history of six months. This payment history ensures that there is enough information in your credit to build a score. Some borrowers don't have a long enough credit history to get a credit score. They should spend some time building up a credit history before they apply.
Omni Mortgage Corp. can answer questions about credit reports and many others. Give us a call: 7184417000.