Before lenders make the decision to lend you money, they must know if you're willing and able to repay that loan. To assess your ability to pay back the loan, they assess your debt-to-income ratio. 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 creditworthines. You can find out more about FICO here.
Credit scores only consider the info in your credit profile. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors. "Profiling" was as dirty a word when FICO scores were first invented as it is now. Credit scoring was envisioned as a way to assess willingness to pay while specifically excluding other personal factors.
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 in your credit history. Late payments count against your score, but a record of paying on time will improve it.
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 generate a score. Some folks don't have a long enough credit history to get a credit score. They should build up a credit history before they apply.
The Mortgage Exchange Service LLC can answer your questions about credit reporting. Give us a call: 703.255-5810.