Before lenders make the decision to give you a loan, they want to know that you're willing and able to pay back that loan. To assess whether you can repay, they look at your income and debt ratio. To assess your willingness to repay, they use your credit score.
Fair Isaac and Company developed the original FICO score to help lenders assess creditworthines. We've written a lot more on FICO here.
Your credit score is a direct result of your repayment history. They never take into account income, savings, down payment amount, or demographic factors like sex ethnicity, nationality or marital status. These scores were invented specifically for this reason. "Profiling" was as dirty a word when these scores were invented as it is now. Credit scoring was envisioned as a way to take into account solely that which was relevant to a borrower's likelihood to repay the lender.
Your current debt level, 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 lower your credit score, but consistently making future payments on time will raise your score.
For the agencies to calculate a credit score, borrowers must have an active credit account with at least six months of payment history. This history ensures that there is enough information in your credit to assign a score. Some borrowers don't have a long enough credit history to get a credit score. They should build up a credit history before they apply.
At Reliance Mortgage Service, Inc, we answer questions about Credit reports every day. Call us: 562 320-0510.