Your Credit Score: What it means

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

Fair Isaac and Company formulated the original FICO score to assess creditworthiness. For details on FICO, read more here.

Your credit score comes from your history of repayment. They never take into account income, savings, amount of down payment, or factors like sex race, national origin or marital status. Fair Isaac invented FICO specifically to exclude demographic factors. Credit scoring was developed as a way to take into account only that which was relevant to a borrower's likelihood to repay the lender.

Your current debt load, past late payments, length of your credit history, and a few other factors are considered. Your score comes from 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.

Your credit 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 history ensures that there is sufficient information in your report to assign an accurate score. Should you not meet the minimum criteria for getting a score, you may need to work on a credit history before you apply for a mortgage.