About Your Credit Score
Before lenders decide to lend you money, they need to know that you're willing and able to repay that mortgage. To assess your ability to repay, they assess your income and debt ratio. To calculate your willingness to repay the loan, they look at your credit score.
Fair Isaac and Company developed the original FICO score to help lenders assess creditworthines. You can learn more about FICO here.
Credit scores only consider the info contained in your credit profile. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors like these. Credit scoring was developed to assess willingness to repay the loan while specifically excluding any other irrelevant factors.
Deliquencies, derogatory payment behavior, current debt level, length of credit history, types of credit and number of inquiries are all considered in credit scores. Your score is calculated wtih positive and negative items in your credit report. Late payments lower your credit score, but consistently making future payments on time will improve your score.
To get a credit score, you must have an active credit account with a payment history of at least six months. This history ensures that there is sufficient information in your credit to generate a score. Some people don't have a long enough credit history to get a credit score. They should build up a credit history before they apply for a loan.
First Community Bank of Central Al. can answer your questions about credit reporting. Give us a call: (334) 285-8850.