A Score that Really Matters: Your Credit Score

Before they decide on the terms of your loan, lenders must know two things about you: whether you can pay back the loan, and if you are willing to pay it back. To assess whether you can pay back the loan, they look at your income and debt ratio. To assess your willingness 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 repayment history. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to assess a borrower's willingness to repay the loan while specifically excluding any other personal factors.

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

For the agencies to calculate a credit score, borrowers must have an active credit account with a payment history of at least six months. This payment history ensures that there is enough information in your report to assign an accurate score. Some people don't have a long enough credit history to get a credit score. They should build up credit history before they apply.

Omni Mortgage Corp. can answer questions about credit reports and many others. Give us a call at 7184417000.