Your Credit Score: What it means

Before lenders decide to give you a loan, they must know if you are willing and able to repay that loan. To assess whether you can repay, they look at your income and debt ratio. To assess how willing you are to repay, they use your credit score.

Fair Isaac and Company developed the original FICO score to assess creditworthiness. You can find out more about FICO here.

Credit scores only assess the info contained in your credit profile. They don't consider income or personal characteristics. Fair Isaac invented FICO specifically to exclude demographic factors. Credit scoring was developed as a way to consider solely that which was relevant to a borrower's likelihood to pay back a loan.

Past delinquencies, derogatory payment behavior, current debt level, length of credit history, types of credit and number of credit inquiries are all considered in credit scores. Your score considers positive and negative items in your credit report. Late payments count against you, but a record of paying on time will improve it.

To get a credit score, borrowers must have an active credit account with a payment history of at least six months. This history ensures that there is sufficient information in your credit to build an accurate score. Some borrowers don't have a long enough credit history to get a credit score. They may need to spend a little time building up a credit history before they apply for a loan.