Generally speaking, someone who has made payments on time in the past will probably do so in the future. Lenders want their evaluation to be as accurate, objective and as consistent as possible. In an effort to achieve these goals, mortgage lenders recently began using credit scores to help in the underwriting process. Credit scores are numerical values that rank individuals according to their credit history at a given point in time. Your score is based on your past payment history, the amount of credit you have outstanding, the amount of credit you have available and other factors.
Lenders look at the entire picture.
Even when a credit score is low, lenders try to find other factors that could overcome any negative credit issues and satisfy their underwriting criteria. The decision to approve or deny a loan will be made based on sound, flexible underwriting guidelines. FICO scores use credit bureau information to obtain a score which indicates how likely someone is to make their loan payments on time. FICO scores range from approximately 350 to 900. Just as credit scores are one factor in determining if you qualify for a loan, they may also be a factor in determining the price of your loan.