What is a "FICO score" used for in mortgage applications?

A FICO score is a key tool used in the mortgage application process to evaluate the creditworthiness of a borrower. This score, developed by the Fair Isaac Corporation, aggregates various credit information, including payment history, amounts owed, length of credit history, new credit, and types of credit used. Lenders rely on this score to make informed lending decisions, as it provides a quantifiable assessment of the borrower's ability to repay the loan based on their previous credit behaviors.

This evaluation directly influences the mortgage application process, as it helps lenders determine whether to approve the application and what interest rates or loan terms to offer. A higher FICO score typically indicates lower risk to the lender, which can result in better loan terms for the borrower. In this context, the other options provided do not accurately reflect the primary purpose of a FICO score within mortgage applications, which is focused on assessing a borrower's credit profile rather than property valuation, income verification, or employment history.