About Credit Scores Credit scores are numeric values that rank the risk of default by an individual 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. According to Fannie Mae and Freddie Mac, two of the largest purchasers of home loans from mortgage lenders, credit scores have proven to be very good predictors of whether a borrower will repay his or her loan. Many lenders use credit scores to help evaluate loan applications. A credit score, however, is just one of many factors considered in the underwriting process.
Lenders look at the entire picture.
Even when a credit score is low, lenders often try to find other factors that could overcome the negative credit issues and satisfy their lending requirements. Different lenders may have different standards for loan approval, based on credit scores and other factors. Because credit bureaus don't currently provide credit scores to consumers, it's important to talk with lenders about how your credit profile fits with their requirements and loan programs. Many people who think they have good credit are surprised to find issues in their credit reports. Sometimes that's because they don't understand how borrowing and bill-paying habits affect their credit rating.