Your Credit Score: What it means

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Before lenders decide to lend you money, they want to know if you're willing and able to pay back that mortgage. To assess your ability to repay, they look at your income and debt ratio. To assess how willing you are to repay, they use your credit score.

Fair Isaac and Company calculated the first FICO score to assess creditworthiness. You can learn more about FICO here.

Credit scores only consider the information contained in your credit profile. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to consider solely what was relevant to a borrower's likelihood to repay the lender.

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

Your credit 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 payment history ensures that there is sufficient information in your credit to build an accurate score. Should you not meet the criteria for getting a score, you might need to establish a credit history prior to applying for a mortgage loan.

AmeriBest Mortgage can answer your questions about credit reporting. Call us: (321) 777-7277.