Before lenders decide to give you a loan, they must know that you're willing and able to repay that loan. To assess whether you can pay back the loan, they look at your income and debt ratio. To calculate your willingness to pay back the mortgage loan, they consult your credit score.
Fair Isaac and Company developed the first FICO score to help lenders assess creditworthines. We've written a lot more on FICO here.
Credit scores only consider the information contained in your credit profile. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors. "Profiling" was as bad a word when FICO scores were invented as it is today. Credit scoring was invented as a way to consider only what was relevant to a borrower's willingness to pay back a loan.
Your current debt level, past late payments, length of your credit history, and other factors are considered. Your score reflects both the good and the bad in your credit report. Late payments lower your score, but establishing or reestablishing a good track record of making payments on time will improve your score.
For the agencies to calculate a credit score, borrowers must have an active credit account with six months of payment history. This history ensures that there is sufficient information in your credit to build an accurate score. Some people don't have a long enough credit history to get a credit score. They should spend a little time building credit history before they apply for a loan.
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