A Score that Really Matters: The Credit Score

Before lenders make the decision to give you a loan, they must know if you're willing and able to repay that loan. To understand 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.

Fair Isaac and Company formulated the original FICO score to assess creditworthines. We've written more on FICO here.

Your credit score is a direct result of your history of repayment. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was developed to assess willingness to pay while specifically excluding any other personal factors.

Your current debt load, past late payments, length of your credit history, and a few other factors are considered. Your score is calculated from the good and the bad in your credit history. Late payments count against you, but a record of paying on time will improve it.

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

At Universal Lending Services, Inc., we answer questions about Credit reports every day. Call us at (337) 264-9990.

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