Credit Scores

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Before lenders decide to give you a loan, they need to know if you are willing and able to repay that loan. To understand whether you can pay back the loan, they look at your income and debt ratio. To assess your willingness to pay back the loan, they look at your credit score.

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

Credit scores only take into account the information in your credit reports. They never take into account income, savings, amount of down payment, or personal factors like gender, ethnicity, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was invented as a way to consider solely what was relevant to a borrower's willingness to pay back the lender.

Your current debt load, past late payments, length of your credit history, and other factors are considered. Your score reflects the good and the bad in your credit report. Late payments count against your score, 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 report to generate an accurate score. Some folks don't have a long enough credit history to get a credit score. They should build up credit history before they apply for a loan.

PREMIERE MORTGAGE SERVICES INC. can answer your questions about credit reporting. Call us: 978-422-2311.