Which score is typically used by lenders to assess creditworthiness?

The FICO score is a numerical representation of a borrower’s creditworthiness, calculated based on their credit history and other relevant financial behaviors. Lenders typically use this score to evaluate the likelihood that an individual will repay borrowed funds. It combines information from various credit accounts, including payment history, outstanding debt, length of credit history, types of credit used, and recent credit inquiries, providing a comprehensive view of an individual's credit risk.

In contrast, the debt-to-income ratio is a measure of an individual's monthly debt payments compared to their gross monthly income, which helps lenders gauge financial stability but does not provide a direct assessment of creditworthiness. Similarly, a net worth calculation offers a snapshot of an individual’s financial health by assessing total assets minus total liabilities, but it doesn’t reflect credit behavior or risk. Lastly, a credit inquiry score usually pertains to how new inquiries into one's credit history may affect a credit score, but it’s not a primary score used by lenders for credit assessments. The FICO score remains the most widely used method for evaluating an individual’s credit risk.