Before they decide on the terms of your mortgage loan (which they base on their risk), lenders need to find out two things about you: whether you can pay back the loan, and if you are willing to pay it back. To assess your ability to repay, they assess your income and debt ratio. In order to assess your willingness to pay back the mortgage loan, they look at your credit score.
Fair Isaac and Company built the original FICO score to help lenders assess creditworthines. We've written more on FICO here.
Credit scores only take into account the info in your credit profile. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors like these. "Profiling" was as bad a word when FICO scores were invented as it is now. Credit scoring was developed to assess a borrower's willingness to pay while specifically excluding other demographic factors.
Your current debt load, past late payments, length of your credit history, and other factors are considered. Your score comes from both the good and the bad of your credit report. Late payments lower your credit score, but establishing or reestablishing a good track record of making payments on time will raise your score.
Your credit report should contain 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 sufficient information in your credit to generate 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 up credit history before they apply.
At The Mortgage Exchange Service LLC, we answer questions about Credit reports every day. Call us: 703.255-5810.