Before lenders decide to give you a loan, they want to know that you're willing and able to pay back that loan. To figure out your ability to repay, lenders assess your debt-to-income ratio. In order to calculate your willingness to pay back the mortgage loan, they look at your credit score.
Fair Isaac and Company built the original FICO score to help lenders assess creditworthines. We've written a lot more on FICO here.
Credit scores only assess the info in your credit profile. They don't take into account income, savings, amount of down payment, or factors like sex ethnicity, national origin or marital status. These scores were invented specifically for this reason. "Profiling" was as bad a word when FICO scores were first invented as it is today. Credit scoring was developed to assess a borrower's willingness to repay the loan while specifically excluding any other demographic factors.
Deliquencies, payment behavior, current debt level, length of credit history, types of credit and number of credit inquiries are all calculated into credit scoring. Your score results from both positive and negative information in your credit report. Late payments count against your score, but a record of paying on time will raise it.
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 payment history ensures that there is enough information in your credit to assign a score. Some people 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.
At Bright Vision Mortgage, we answer questions about Credit reports every day. Call us at (904) 342-3622.