A Score that Really Matters: The Credit Score

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

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

Your credit score comes from your history of repayment. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to take into account solely that which was relevant to a borrower's willingness to pay back the lender.

Deliquencies, payment behavior, debt level, length of credit history, types of credit and number of inquiries are all considered in credit scoring. Your score is calculated wtih both positive and negative items in your credit report. Late payments will lower your score, but establishing or reestablishing a good track record of making payments on time will improve your score.

For the agencies to calculate a credit score, borrowers must have an active credit account with a payment history of six months. This history ensures that there is enough information in your report to assign an accurate score. Some folks don't have a long enough credit history to get a credit score. They should spend a little time building a credit history before they apply.

At Channel Mortgage LLC, we answer questions about Credit reports every day. Call us at 7186399500.

Basic Pre-Approval

Get the Best Mortgage Rate! Tell us a little about your current needs and we can use that information to match you with just the right loan.

Tell us about your loan needs.
How can we get in touch with you?
Tell us about your credit history.

Channel Mortgage LLC

Connecting the Dots to Home Ownership

55-25 69th Street 1st Floor
Maspeth, NY 11378-1806