Whether you're making a big purchase like a house or a new car, or a less ambitious transaction like applying for a credit card, your prospective lender always runs a credit report on you. But is everyone getting a fair shake when it comes to credit scoring?

Many call credit scoring a simple, objective way to determine one's ability to repay loans—where race, nationality and income are not considered. Others, however, believe certain scoring systems have unequal impact on minority and low-income credit applicants, as these groups are more likely to use non-traditional forms of credit.

Your Score Is Just One Factor
The credit scoring system preferred by most lenders is produced by Fair, Isaac & Company Inc. The company's software lets lenders and credit bureaus generate a credit "score" based on a borrower's credit history. Known as FICO scores, these calculations play a significant role in obtaining mortgage loans.

Fair Isaac won't say exactly how FICO scores are tabulated, but the company does acknowledge which factors it uses for calculating its totals. In order from most to least important, they are: late and delinquent payments, bankruptcies, outstanding debt, length of credit history, new applications for credit, and types of credit in use. It is illegal to include ethnicity, religion, gender, marital status or nationality in determining credit scores.

The Center for Community Change, a Washington D.C.-based housing advocacy group, is critical of FICO scores. Debby Goldberg, acting director of the group's Neighborhood Revitalization Project, says credit scoring raises several questions: Who are the people upon whom the credit scoring systems are built? How do non-traditional sources of credit affect a prospective borrower's ability to handle debt? And what happens when inaccuracies in a credit report are included in the score?

"Because this stuff is proprietary, it's difficult to get answers," Goldberg says. Fair Isaac maintains that FICO scores treat all borrowers equally.

Alternative Systems
However, regulatory agencies are beginning to pay more attention to credit scoring in the mortgage industry. Last year, the Federal Trade Commission began holding public forums on the issue.

Fair Issac appears to be responsive to such concerns. As soon as August, consumers should be able to obtain their actual credit scores from the company.

Goldberg says the U.S. Department of Housing and Urban Development is working on a separate credit scoring system and plans to publish how it works. "That may encourage some of the others to take that same step," she says.

If you're concerned about your credit history, you can order a copy of your credit report , see if there are errors and if so, correct them. You can also ask your lender for your credit score and provide your loan agent with explanations for late payments.

As Goldberg says, "You've got to be your own best advocate."