About Your Credit Score
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Before lenders decide to give you a loan, they must know that you are willing and able to pay back that loan. To assess your ability to repay, lenders assess your debt-to-income ratio. To assess your willingness to pay back the mortgage loan, they look at your credit score.
The most commonly used credit scores are called FICO scores, which were developed by Fair Isaac & Company, Inc. The FICO score ranges from 350 (very high risk) to 850 (low risk). For details on FICO, read more here.
Credit scores only take into account the info in your credit profile. They never take into account income, savings, amount of down payment, or demographic factors like sex race, nationality or marital status. Fair Isaac invented FICO specifically to exclude demographic factors. Credit scoring was developed as a way to consider only that which was relevant to a borrower's willingness to pay back a loan.
Your current debt load, past late payments, length of your credit history, and a few other factors are considered. Your score results from positive and negative items in your credit report. Late payments count against your score, but a record of paying on time will improve it.
Your credit 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 enough information in your report to generate a score. If you don't meet the minimum criteria for getting a score, you may need to establish a credit history before you apply for a mortgage loan.