A credit score is a number that lenders use to estimate risk.  Experience has shown them that borrowers with higher credit scores are less likely to default on a loan.  Credit scores are generated by plugging the data from your credit report into analytical software.  Lenders look at credit scores but also income, employment history and the type of credit you are seeking.

Borrowers with good credit scores are typically offered more financing optioins and better interest rates, but don't be discouraged if your scores are lower, because there's a mortgage product for nearly everyone.