Credit Scores
What is a credit score?
Before deciding on what terms lenders will offer you on a loan (which they base on the “risk” to them), they want to know two things about you: your ability to pay back the loan and your willingness to pay back the loan. For the first, they look at your income-to-debt obligation ratio. For your willingness to pay back the loan, they consult your credit score. The most widely used credit scoring models have a range between 350 (high risk) and 850 (low risk).
Credit scores only consider the information contained in your credit profile. They do not consider your income, savings, down payment amount, or demographic factors like gender, race, nationality or marital status. Credit scoring was developed as a way to consider only what was relevant to somebody’s willingness to repay a loan.
Different portions of your credit history are given different weights:
- 35% of your score is based on your specific payment history.
- 30% is your current level of indebtedness.
- 15% is the time your open credit has been in use (ten year old accounts are good, six month old ones aren’t as good) and credit mix (installment loans such as student loans, car loans, etc. versus revolving and debit accounts like credit cards).
- 5% is the number of inquiries — credit scores requested.
Your credit report must 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 ensures that there is enough information in your report to generate an accurate score. If you do not meet the minimum criteria for getting a score, we may still be able to help. For borrowers with no credit score we simply need to establish that you have been paying 3 things on time for a year. Give us a call and we can help determine that.
Latest Blog Post
Credit Union vs Mortgage Broker in Kalamazoo: Your 2026 Lending Flight Plan
Is sticking with the familiar branch on West Main actually the most efficient way to clear the runway for your new home? When weighing the choice of a credit union vs mortgage broker Kalamazoo buyers often feel torn between the comfort of a lifelong banking relationship and the need for a more agile flight plan. It’s natural to feel anxious about the closing timeline when homes are selling in just 24 days, especially with median prices in our community climbing as much as 10% over the last year. You don’t want to miss out on a competitive 6.49% rate just because your local branch has a rigid set of requirements.
We understand that you want more than just a transaction; you want the certainty of a lower monthly payment and a partner who won’t let you miss out on specialized lift from programs like MSHDA. This guide serves as your pre-flight checklist to discover which lending path offers the best trajectory for your specific goals. We will break down the structural differences in rates and requirements, helping you navigate the complexities of the 2026 market with the precision of a seasoned air traffic controller to ensure a smooth landing at the closing table.
Visit Jeremy's Blog