Credit Scores

Before lenders make the decision to lend you money, they must know that you're willing and able to repay that loan. To figure out your ability to repay, they look at 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. The FICO score ranges from 350 (very high risk) to 850 (low risk). For details on FICO, read more here.

Credit scores only assess the info in your credit reports. They do not take into account your income, savings, amount of down payment, or personal factors like gender, race, nationality or marital status. Fair Isaac invented FICO specifically to exclude demographic factors. "Profiling" was as bad a word when FICO scores were first invented as it is today. Credit scoring was developed as a way to take into account solely that which was relevant to a borrower's willingness to pay back the lender.

Your current debt level, 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 will lower your score, but consistently making future payments on time will raise your score.

Your report should have 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 credit to build a score. Some people don't have a long enough credit history to get a credit score. They should build up credit history before they apply for a loan.

Reliance Mortgage Service, Inc can answer questions about credit reports and many others. Call us: 562 320-0510.

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