Your Credit Score: What it means

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

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

Credit scores only assess the information contained in your credit profile. They don't consider income or personal characteristics. These scores were invented specifically for this reason. "Profiling" was as dirty a word when FICO scores were invented as it is today. Credit scoring was developed to assess willingness to pay while specifically excluding other personal factors.

Your current debt load, past late payments, length of your credit history, and a few other factors are considered. Your score considers positive and negative items in your credit report. Late payments count against your score, but a consistent record of paying on time will raise it.

Your report must contain 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 history ensures that there is enough information in your report to assign an accurate score. Some borrowers don't have a long enough credit history to get a credit score. They should spend a little time building up a credit history before they apply for a loan.

Washingtonian Mortgage, LLC can answer questions about credit reports and many others. Call us: 4104512755.