Credit Scores

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

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

Credit scores only take into account the info contained in your credit profile. They do not take into account your income, savings, down payment amount, or demographic factors like gender, ethnicity, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was developed as a way to consider only what was relevant to a borrower's likelihood to repay a loan.

Your current debt load, past late payments, length of your credit history, and other factors are considered. Your score reflects the good and the bad of your credit history. Late payments lower your credit score, but consistently making future payments on time will raise your score.

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

FNB Town Square Mortgage can answer questions about credit reports and many others. Call us: (817) 235-3089.