Your Credit Score: What it means
Before lenders make the decision to lend you money, they need to know that you are willing and able to repay that loan. To understand your ability to pay back the loan, they assess your income and debt ratio. To assess your willingness to pay back the mortgage loan, they look at your credit score.
Fair Isaac and Company developed the original FICO score to assess creditworthines. We've written a lot more on FICO here.
Your credit score comes from your history of repayment. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to assess a borrower's willingness to repay the loan without considering any other irrelevant factors.
Deliquencies, payment behavior, debt level, length of credit history, types of credit and the number of credit inquiries are all considered in credit scoring. Your score reflects both the good and the bad in your credit report. Late payments count against you, but a record of paying on time will improve it.
To get a credit score, you must have an active credit account with a payment history of at least six months. This payment history ensures that there is sufficient information in your report to build a score. Some folks don't have a long enough credit history to get a credit score. They should build up credit history before they apply.