Your Credit Score: What it means

Before lenders decide to lend you money, they have to know that you're willing and able to repay that loan. To figure out your ability to pay back the loan, they look at your debt-to-income ratio. To assess how willing you are to repay, they use your credit score.

Fair Isaac and Company developed the original FICO score to help lenders assess creditworthines. We've written a lot more about FICO here.

Credit scores only take into account the info contained in your credit profile. They do not take into account 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 assess willingness to pay without considering other irrelevant factors.

Your current debt load, past late payments, length of your credit history, and a few other factors are considered. Your score reflects the good and the bad of your credit report. Late payments lower your credit score, but establishing or reestablishing a good track record of making payments on time will improve your score.

Your report should 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. Some borrowers don't have a long enough credit history to get a credit score. They may need to spend a little time building credit history before they apply for a loan.

At Metro Mortgage, we answer questions about Credit reports every day. Give us a call: 866-300-1550.