Credit Scoring

	In the market for a new mortgage? We'd be thrilled to talk about our many mortgage solutions! Give us a call at (926) 228-1944. Ready to begin? Apply Now.

Before deciding on what terms they will offer you a mortgage loan (which they base on their risk), lenders must know two things about you: your ability to pay back the loan, and your willingness to repay the loan. To assess your ability to pay back the loan, they look at your debt-to-income ratio. In order to calculate your willingness to repay the mortgage loan, they look at your credit score.

The most commonly used credit scores are FICO scores, which were developed by Fair Isaac & Company, Inc. Your FICO score ranges from 350 (high risk) to 850 (low risk). You can learn more about FICO here.

Credit scores only assess the information in your credit reports. They don't take into account your income, savings, down payment amount, or factors like sex race, nationality or marital status. Fair Isaac invented FICO specifically to exclude demographic factors like these. Credit scoring was developed to assess willingness to pay while specifically excluding other demographic factors.

Your current debt load, past late payments, length of your credit history, and other factors are considered. Your score comes from both the good and the bad of your credit report. Late payments count against your score, but a record of paying on time will raise it.

Your report must have 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 sufficient information in your credit to calculate an accurate score. If you don't meet the minimum criteria for getting a score, you might need to work on a credit history prior to applying for a mortgage loan.

Premier Nationwide Lending can answer your questions about credit reporting. Call us at (926) 228-1944.