What is a tool used by mortgage professionals to evaluate a client's creditworthiness?

A credit report is a crucial tool used by mortgage professionals to evaluate a client's creditworthiness. It provides a detailed account of an individual’s credit history, including their borrowing and repayment behaviors, outstanding debts, and payment histories. This information allows lenders to assess the risk of lending money to that individual. A strong credit report typically demonstrates responsible credit management, which can lead to more favorable loan terms, such as lower interest rates.

In contrast, a loan estimate offers potential borrowers an overview of loan terms and estimated costs but does not assess creditworthiness directly. The debt-to-income ratio is a measure of an individual's monthly debt payments compared to their monthly income, providing insight into financial stability but not a comprehensive view of credit history. A pre-approval letter indicates that a lender has tentatively assessed a borrower and is ready to offer a loan within certain parameters, but it relies on the information from a credit report and other factors rather than serving as a standalone tool for evaluating creditworthiness.