Before lenders make the decision to give you a loan, they want to know if you're willing and able to repay that mortgage loan. To figure out your ability to pay back the loan, they assess your debt-to-income ratio. In order to calculate your willingness to pay back the loan, they consult your credit score.
Fair Isaac and Company developed the original FICO score to help lenders assess creditworthines. You can learn more about FICO here.
Credit scores only consider the info in your credit profile. They never take into account income, savings, down payment amount, or personal factors like gender, ethnicity, nationality or marital status. These scores were invented specifically for this reason. "Profiling" was as bad a word when FICO scores were invented as it is today. Credit scoring was invented as a way to take into account solely what was relevant to a borrower's likelihood to pay back the lender.
Deliquencies, payment behavior, current debt level, length of credit history, types of credit and number of credit inquiries are all calculated into credit scores. Your score results from positive and negative items in your credit report. Late payments count against you, 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 payment history ensures that there is sufficient information in your report to generate a score. If you don't meet the minimum criteria for getting a credit score, you may need to work on your credit history prior to applying for a mortgage.
At Mutual Security Mortgage, we answer questions about Credit reports every day. Call us at (303) 931-7879.