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A Score that Really Matters: The Credit Score

Shopping for a mortgage loan? We'd be thrilled to discuss our many mortgage solutions! Give us a call today at (256) 543-9211. Want to get started? Apply Online Now.

Before they decide on the terms of your loan, lenders need to find out two things about you: whether you can pay back the loan, and if you will pay it back. To assess your ability to repay, they assess your debt-to-income ratio. To assess your willingness to repay, they use your credit score.

The most widely used credit scores are FICO scores, which were developed by Fair Isaac & Company, Inc. The FICO score ranges from 350 (high risk) to 850 (low risk). We've written a lot more on FICO here.

Credit scores only take into account the information in your credit reports. They never consider your 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 a borrower's willingness to pay without considering other irrelevant factors.

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

Your Preferred Local Lenderour credit report should contain 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 sufficient information in your report to build an accurate score. Some people 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.

PrimeMax Mortgage Group can answer questions about credit reports and many others. Call us at (256) 543-9211.

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PrimeMax Mortgage Group, NMLS#195523

311 West Grand Ave
Rainbow City, AL 35906