Credit Scoring
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Before lenders decide to give you a loan, they have to know that you are willing and able to pay back that mortgage. To assess your ability to pay back the loan, lenders look at your debt-to-income ratio. To calculate your willingness to repay the mortgage loan, they consult your credit score.
Fair Isaac and Company developed the original FICO score to help lenders assess creditworthiness. For details on FICO, read more here.
Your credit score comes from your history of repayment. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors like these. "Profiling" was as bad a word when these scores were first invented as it is in the present day. Credit scoring was developed to assess willingness to repay the loan without considering any other personal factors.
Your current debt load, past late payments, length of your credit history, and a few other factors are considered. Your score is calculated from the good and the bad in your credit report. Late payments lower your credit score, but consistently making future payments on time will improve your score.
To get a credit score, borrowers must have an active credit account with six months of payment history. This payment history ensures that there is enough information in your report to generate a 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.