Before lenders make the decision to give you a loan, they need to know that you are willing and able to repay that mortgage loan. To assess your ability to repay, they assess your income and debt ratio. To assess your willingness to pay back the loan, they look at your credit score.
Fair Isaac and Company formulated the first FICO score to assess creditworthines. We've written a lot more on FICO here.
Your credit score is a result of your repayment history. They don't take into account income, savings, amount of down payment, or personal factors like gender, ethnicity, nationality or marital status. Fair Isaac invented FICO specifically to exclude demographic factors. "Profiling" was as dirty a word when these scores were first invented as it is now. Credit scoring was invented as a way to take into account only what was relevant to a borrower's likelihood to repay the lender.
Your current debt load, past late payments, length of your credit history, and a few other factors are considered. Your score reflects both the good and the bad of your credit report. Late payments count against your score, but a record of paying on time will improve it.
Your credit report should 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 history ensures that there is sufficient information in your report to build an accurate score. Some folks don't have a long enough credit history to get a credit score. They may need to build up credit history before they apply for a loan.
Savers Home Loans can answer questions about credit reports and many others. Call us at (800) 974-0509.