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Before they decide on the terms of your mortgage loan (which they base on their risk), lenders must find out two things about you: whether you can pay back the loan, and how committed you are to repay the loan. To assess your ability to pay back the loan, lenders look at your debt-to-income ratio. In order to assess your willingness to pay back the loan, they consult your credit score.
The most commonly used credit scores are FICO scores, which were developed by Fair Isaac & Company, Inc. Your FICO score ranges from 350 (high risk) to 850 (low risk). You can learn more on FICO here.
Credit scores only assess the info contained in your credit profile. They never take into account income, savings, down payment amount, or demographic factors like gender, race, national origin or marital status. Fair Isaac invented FICO specifically to exclude demographic factors like these. Credit scoring was invented as a way to consider only what was relevant to a borrower's likelihood to repay the lender.
Your current debt level, past late payments, length of your credit history, and other factors are considered. Your score considers both positive and negative information in your credit report. Late payments lower your credit score, but consistently making future payments on time will improve your score.
Your 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 enough information in your report to calculate a score. Some borrowers don't have a long enough credit history to get a credit score. They may need to spend some time building a credit history before they apply.