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Before they decide on the terms of your loan, lenders must discover two things about you: your ability to repay the loan, and if you will pay it back. To assess whether you can pay back the loan, they look at your income and debt ratio. To assess your willingness to repay the mortgage loan, they consult your credit score.
Fair Isaac and Company calculated the original FICO score to assess creditworthiness. For details on FICO, read more here.
Credit scores only take into account the info in your credit profile. They do not take into account your income, savings, down payment amount, or demographic factors like gender, race, nationality or marital status. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to take into account solely what was relevant to a borrower's likelihood to pay back a loan.
Deliquencies, derogatory payment behavior, debt level, length of credit history, types of credit and the number of inquiries are all considered in credit scores. Your score is calculated from both the good and the bad of your credit history. Late payments count against you, but a record of paying on time will improve it.
To get a credit score, borrowers must have an active credit account with at least six months of payment history. This payment history ensures that there is sufficient information in your report to build an accurate score. Some borrowers don't have a long enough credit history to get a credit score. They may need to build up credit history before they apply.