Why is it essential for a mortgage application to include a credit report?

Including a credit report in a mortgage application is crucial because it helps lenders assess the creditworthiness of the borrower. The credit report contains detailed information about the borrower's credit history, including their payment patterns, outstanding debts, and overall financial behavior. This information allows lenders to evaluate the risk associated with lending to that borrower, helping them decide whether to approve the mortgage application and under what terms. A strong credit history typically results in better loan terms, such as lower interest rates, while a poor credit history may lead to higher rates or even denial of the loan. By effectively conveying the borrower's ability and reliability to repay the loan, the credit report plays a pivotal role in the lending decision process.