Credit Scoring

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Before lenders make the decision to lend you money, they need to know that you are willing and able to pay back that mortgage. To assess your ability to repay, they assess your income and debt ratio. To assess your willingness to repay, they use your credit score.

Fair Isaac and Company formulated the original FICO score to help lenders assess creditworthines. You can learn more on FICO here.

Credit scores only consider the info contained in your credit profile. They do not take into account income, savings, amount of down payment, or demographic factors like gender, race, nationality or marital status. These scores were invented specifically for this reason. Credit scoring was developed to assess a borrower's willingness to repay the loan while specifically excluding other demographic factors.

Your current debt level, past late payments, length of your credit history, and other factors are considered. Your score results from positive and negative items in your credit report. Late payments count against you, but a consistent record of paying on time will raise it.

To get a credit score, borrowers must have an active credit account with a payment history of six months. This history ensures that there is sufficient information in your report to assign an accurate 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.

New England Alliance Mortgage can answer your questions about credit reporting. Call us at (860) 388-9814.