Before lenders decide to give you a loan, they have to know that you're willing and able to pay back that loan. To understand your ability to pay back the loan, they look at your income and debt ratio. To calculate your willingness to repay the loan, they consult your credit score.
Fair Isaac and Company calculated the original FICO score to assess creditworthines. We've written more about FICO here.
Credit scores only consider the info in your credit profile. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was developed to assess willingness to repay the loan while specifically excluding other demographic factors.
Your current debt load, past late payments, length of your credit history, and other factors are considered. Your score results from positive and negative information in your credit report. Late payments will lower your score, but consistently making future payments on time will improve your score.
Your report must 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 enough information in your credit to calculate an accurate score. Should you not meet the minimum criteria for getting a credit score, you might need to work on a credit history before you apply for a mortgage.
At Reliance Mortgage Service, Inc, we answer questions about Credit reports every day. Call us at 5623200510.