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Before lenders decide to lend you money, they need to know that you are willing and able to repay that mortgage. To understand whether you can repay, they look at your income and debt ratio. To assess your willingness to repay, they use your credit score.
The most widely used credit scores are FICO scores, which Fair Isaac & Company, a financial analytics agency, developed. Your FICO score ranges from 350 (high risk) to 850 (low risk). You can learn more about FICO here.
Credit scores only take into account the info contained in your credit profile. They don't consider income, savings, down payment amount, or demographic factors like sex race, 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 in the present day. Credit scoring was developed to assess a borrower's willingness to repay the loan without considering other personal factors.
Deliquencies, payment behavior, current debt level, length of credit history, types of credit and the number of inquiries are all calculated into credit scoring. Your score reflects both the good and the bad in your credit history. Late payments count against your score, but a record of paying on time will improve it.
For the agencies to calculate a credit score, you must have an active credit account with at least six months of payment history. This history ensures that there is enough 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 may need to build up a credit history before they apply for a loan.