A Score that Really Matters: The Credit Score
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Before they decide on the terms of your loan, lenders want to discover two things about you: whether you can repay the loan, and your willingness to repay the loan. To assess your ability to repay, they assess your debt-to-income ratio. To assess how willing you are to repay, they use your credit score.
Fair Isaac and Company formulated the original FICO score to help lenders assess creditworthiness. You can learn more on FICO here.
Credit scores only consider the info in your credit profile. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors. Credit scoring was developed as a way to consider solely what was relevant to a borrower's likelihood to pay back the lender.
Your current debt level, past late payments, length of your credit history, and a few other factors are considered. Your score is calculated from both the good and the bad in your credit history. Late payments lower your credit score, but establishing or reestablishing a good track record of making payments on time will improve your score.
Your credit 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 sufficient information in your credit to build a score. Should you not meet the criteria for getting a score, you may need to work on your credit history before you apply for a mortgage loan. However, there are programs for borrowers who truly have a "no score" regarding their credit history.