Four years ago, credit scoring had little to do with mortgage lending . When reviewing the credit worthiness of a borrower, an underwriter would make a subjective decision based on past payment history.
Then things changed.
Lenders studied the relationship between credit scores and mortgage delinquencies. There was a definite relationship. Almost half of those borrowers with FICO® scores below 550 became ninety days delinquent at least once during their mortgage. On the other hand, only two out of every 10,000 borrowers with FICO® scores above eight hundred became delinquent.
So lenders began to take a closer look at FICO® scores and this is what they found out. The chart below shows the likelihood of a ninety day delinquency for specific FICO® scores.
FICO® Score |
odds of a delinquent account |
| 595 |
2.25 |
to |
1 |
| 600 |
4.5 |
to |
1 |
| 615 |
9 |
to |
1 |
| 630 |
18 |
to |
1 |
| 645 |
36 |
to |
1 |
| 660 |
72 |
to |
1 |
| 680 |
144 |
to |
1 |
| 700 |
288 |
to |
1 |
| 780 |
576 |
to |
1 |
