Credit Scores

Before lenders make the decision to give you a loan, they want to know that you are willing and able to repay that loan. To assess whether you can pay back the loan, they assess your income and debt ratio. To assess your willingness to repay the loan, they consult your credit score.

The most commonly used credit scores are FICO scores, which were developed by Fair Isaac & Company, Inc. Your FICO score ranges from 350 (high risk) to 850 (low risk). You can find out more on FICO here.

Your credit score is a result of your repayment history. They don't consider income, savings, down payment amount, or factors like gender, race, nationality or marital status. These scores were invented specifically for this reason. "Profiling" was as dirty a word when FICO scores were invented as it is today. Credit scoring was envisioned as a way to assess a borrower's willingness to repay the loan without considering any other personal factors.

Past delinquencies, derogatory payment behavior, current debt level, length of credit history, types of credit and number of credit inquiries are all considered in credit scoring. Your score is calculated from both the good and the bad of your credit history. Late payments count against your score, but a consistent record of paying on time will raise it.

To get a credit score, borrowers must have an active credit account with at least six months of payment history. This history ensures that there is sufficient information in your credit to calculate an accurate score. Some folks don't have a long enough credit history to get a credit score. They should build up a credit history before they apply.

At The Mortgage Exchange Service LLC, we answer questions about Credit reports every day. Give us a call: 703.255-5810.

Basic Pre-Approval

Get the Best Mortgage Rate! Tell us a little about your current needs and we can use that information to match you with just the right loan.

Tell us about your loan needs.
How can we get in touch with you?
Tell us about your credit history.