Credit Scores
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Sublime Financial works with families here in Dallas looking for home loans every day. One of the main questions we get from our Dallas home buyers as well as home buyers across Texas is, "What about my credit?". Everyone wants the dream of owning their own home and Sublime Financial is here to help that dream become reality. Here is just a small bit of information about credit and how it affects buying a home in Dallas or anywhere else. The links will take you to our other articles on this.
Before lenders decide on your rate in Texas, they want to know two things about you: your ability to pay back the loan on your house, and your capacity to pay the loan back. To assess your ability to repay, lenders will look at your debt-to-income ratio. To calculate your willingness to pay back the mortgage loan, they look at your credit score.
The most commonly used credit scores are called FICO scores, which Fair Isaac & Company, a financial analytics agency, developed. Your FICO score ranges from 350 (very high risk) to 850 (low risk). We've written more on FICO here.
Your credit score comes from your history of repayment. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors. Credit scoring was envisioned as a way to take into account solely what was relevant to a borrower's ability and willingness to repay the lender.
Your current debt load, past late payments, length of your credit history, and other factors are considered. Your score is calculated with positive and negative information in your credit report. Late payments lower your score, but establishing or reestablishing a good track record of making payments on time will improve your score.
For the agencies to calculate a credit score, you must have an active credit account with a payment history of at least six months. This history ensures that there is enough information in your report to calculate an accurate score.
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Sublime Financial, LLC can answer your questions about credit reporting. Call us: 214-396-3650.