About Your Credit Score

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

The most commonly used credit scores are called FICO scores, which were developed by Fair Isaac & Company, Inc. Your 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 don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors like these. Credit scoring was envisioned as a way to consider solely what was relevant to a borrower's willingness to repay a loan.

Deliquencies, payment behavior, current debt level, length of credit history, types of credit and number of inquiries are all considered in credit scoring. Your score is based on both the good and the bad of your credit report. Late payments count against you, but a consistent record of paying on time will improve it.

To get 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 credit to build an accurate score. Some people don't have a long enough credit history to get a credit score. They may need to build up credit history before they apply for a loan.

First Community Bank of Central Al. can answer your questions about credit reporting. Give us a call: (334) 285-8850.

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