Your Credit Score: What it means

Before lenders decide to lend you money, they want to know if you're willing and able to pay back that mortgage. To assess your ability to pay back the loan, they look at your debt-to-income ratio. In order to calculate your willingness to repay the loan, they consult your credit score.

Fair Isaac and Company developed the original FICO score to help lenders assess creditworthiness. We've written more on FICO here.

Credit scores only consider the information in your credit profile. They do not consider income, savings, down payment amount, or demographic factors like sex ethnicity, national origin or marital status. These scores were invented specifically for this reason. Credit scoring was developed to assess willingness to pay without considering other personal factors.

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 of your credit history. Late payments count against your score, but a consistent record of paying on time will improve it.

To get a credit score, borrowers must have an active credit account with a payment history of at least six months. This history ensures that there is enough information in your report to generate a score. Should you not meet the criteria for getting a score, you might need to work on a credit history before you apply for a mortgage loan.