Before lenders make the decision to lend you money, they want to know that you are willing and able to repay that mortgage loan. To understand your ability to repay, they look at your income and debt ratio. To assess your willingness to repay, they use your credit score.
Fair Isaac and Company formulated the original FICO score to help lenders assess creditworthiness. You can find out more about FICO here.
Your credit score comes from your repayment history. They don't consider income or personal characteristics. These scores were invented specifically for this reason. "Profiling" was as dirty a word when these scores were invented as it is today. Credit scoring was envisioned as a way to assess willingness to repay the loan while specifically excluding other irrelevant 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 you, but a consistent record of paying on time will improve it.
To get a credit score, borrowers must have an active credit account with six months of payment history. This history ensures that there is enough information in your report to calculate a score. If you don't meet the criteria for getting a credit score, you might need to work on your credit history before you apply for a mortgage.
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