A Score that Really Matters: The Credit Score

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Before lenders decide to lend you money, they must know if you're willing and able to pay back that loan. To assess your ability to repay, they assess your debt-to-income ratio. To assess your willingness to repay, they use your credit score.

Fair Isaac and Company calculated the original FICO score to help lenders assess creditworthiness. We've written a lot more on FICO here.

Credit scores only consider the information contained in your credit reports. They never consider your income, savings, amount of down payment, or factors like gender, ethnicity, nationality or marital status. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to consider solely that which was relevant to a borrower's likelihood to pay back the lender.

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

To get a credit score, you must have an active credit account with six months of payment history. This history ensures that there is sufficient information in your credit to generate an accurate 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 for a loan.

At Fusion Mortgage Lending, we answer questions about Credit reports every day. Give us a call at (909) 484-3404.