Every time there is an inquiry on your credit report, points are added or subtracted based on certain criteria: the length of time you have had the credit cards, timely payment, and the maximum balance left on them. Your score can be anywhere between the high 300's and the low 800's.

Lenders have determined that there is a connection between your credit scores and whether payments were made on time. Borrowers with scores above 680 almost always made their payments on time. Borrowers with scores below 600 seemed to have fallen behind at some point.

Basically, lower credit scores require a more in depth review than higher scores. Often, mortgage lenders will not even consider a score below 600 because the risk of default is too great.

• Delinquencies
• Too many accounts opened within the last twelve months
• Short credit history
• Balances on revolving credit are near the maximum limits
• Public records, such as tax liens, judgments, or bankruptcies
• No recent credit card balances
• Too many recent credit inquiries
• Too few revolving accounts
• Too many revolving accounts
  

Based on your credit scores, your loan may be approved or denied. If your scores are above a certain number you may be able to reduce points on a loan. On the other hand, if your FICO score is low, a lender may add on costs to the loan. You may also be subject to a larger down payment. In reality, many factors affect your FICO score. Lenders use these factors as a guideline to judge your credit worthiness.