WHEN YOU APPLY

for a mortgage, the moment of truth comes as the lender pulls your credit score. It's a deeply weird and mysterious experience. Pulls it from where? What forces lurk behind the three-digit number that determines your payments for the next 30 years? You might envision a bank of steel-hearted mainframes blinking deep in the bowels of some vast data warehouse, tended by an obsessive mad scientist who tinkers endlessly with a tangled set of scoring algorithms.

That's not too far from the truth. Fair Isaac, the predictive-analytics firm responsible for the FICO credit-score formula used by nearly all of the nation's largest card issuers, auto lenders and banks, does maintain a subterranean data warehouse outside its Minneapolis headquarters. But the person in charge of the formula that transmogrifies your credit history into a score seems reassuringly sane. With her brown bangs, glasses and straightforward manner, Fair Isaac scoring-development VP Susan Blue Hitt reminds one of the friendly classmate in sophomore math who reliably shared her algebra notes. She lives in the suburbs of Austin, Tex., flies planes for fun, watches football and confesses to being the sort of statistics hound who issues her 11-year-old son a "Bank of Mom" statement along with his allowance. Ben Bernanke may get all the attention, but this low-profile math geek probably has more influence over your loan terms. Recently, she's been working on an updated formula that will change the way credit scores are calculated, affecting interest rates for 160 million Americans.

The FICO scoring model is full of subtleties that clever consumers can exploit to improve their scores, and tweaks must be made to thwart the gamers. There are also changes in consumer credit use to consider. Ten years ago a guy with five credit cards was considered a risky, out-of-control credit addict. Not anymore. Mortgages are bigger, of course, and people do more comparison-shopping for loans these days, generating more credit-bureau inquiries. All this means that every two years, a new model must be built from the ground up.

Hitt swears that "model building can be fun," but it's a lengthy, laborious process. To build the 2008 version, which will launch early next year, Hitt and her team of 25 analysts pulled the 2005 and 2007 credit reports of 5 million consumers to see how their credit profiles fared over time. Given this historical data, she can predict how characteristics such as your total number of credit cards (three is often ideal) or average account age (longer is better) affect your chance of defaulting on a loan in the future. Every one of the 30 or so possible characteristics derived from your report earns a certain number of points, but the calculations don't end there. Each characteristic counts for a bigger or smaller portion of your total score, depending on which of 12 borrower profiles you fit (kid with his first credit card, for example, or perennial deadbeat).

So how might all this model tweaking affect the rate you get on your next mortgage? For responsible borrowers, the news is good. In the updated formula, a single late payment on an otherwise unblemished record won't do as much damage to your score as in the past. Your kids may not fare as well, though: Starting in '08, you won't be able to boost their credit scores by adding their names to your card accounts.

And for those looking for tricky new ways to boost their credit scores, Hitt has one piece of advice: "Get over it!" She earned her own score, a respectable 770, by yawn paying the bills on time. It's far from a perfect 850, but she's not losing any sleep: "As long as it's higher than my husband's, it's all right."