Why are credit FICO scores used to apply for a mortgage?
Before deciding on what terms and conditions are associated with your mortgage, lenders want to know two things about you: 1. your ability to pay back the loan 2. your willingness to pay back the loan For your ability to repay, they look at your total income-to-debt obligation ratio. For your willingness to pay back the loan, they consult your credit score for your credit risk. Credit FICO scores only consider the information contained in your credit history. Your FICO score does not consider your income, savings, down payment amount, or personal characteristics. Lenders use credit FICO scores as an efficient and unbiased means to provide a decision of your mortgage loan without discrimination of age, gender, race, ethnicity or marital status. Past delinquencies, derogatory payment behavior, current debt level, length of credit history, types of credit and number of inquiries are all considered in credit scores. Your score considers both positive and negative information in your credit
