<prompt> Human: Im going to assume the reason people want a strong credit score is because when they need a loan for a carmortgagebusinessetc. they will be accepted. A lot of people probably think that as long as you have a good credit score, youll be accepted for a loan and that is simply not true. I recently started working as a credit analyst in commercial lending and your credit score is the last thing we consider. This is because your credit score is an accumulation of past repayments, not your current ability to repay a loan that you are currently applying for. For instance, there are people who have run a successful business in the past. They always paid back their debts on time since they were able to, and therefore have immaculate credit scores. They are now denied loans because their business is no longer doing well and will be rated as unable to repay the loan. Basically, past ability to repay loans current ability to repay loans. Full disclosure: Do bear in mind that purchasing an automobile residential home may differ as that is not what Im specializing in, but I imagine they would be similar. If anyone works in that department and its completely different, then this thread will only apply to people interested in getting approved for commercial loans. Furthermore, Ive only worked for 1 bank for a limited time so this may not be true for other banks.So what is important you may ask? Whenever an application arrives for a loan or line of credit, the very first thing we look at is the applicants cash-flows we do an analysis consisting of all reoccurring incomes vs. expenditures. Basically all the money that you bring in wages, income from businesses you own, rental income if you own property, etc. must be greater by a certain minimum degree than all the reoccurring money that goes out mortgages, rent, auto, credit cards, etc. This is called the DSCR short for debt service coverage ratio If the applicant does not meet this minimum cash-flow requirement, the application is denied. This is because if your cash inflows are insufficient or your cash outflows are greater than your cash inflows, you do not have the capacity to repay the loan, something that adds additional expenditures to your budget. Next the collateral is examined. Assuming the loan is secured by collateral as it often is, it is appraised and compared to the loan amount since it is a second source of repayment cash inflows are your first. This is called loan-to-value and must not exceed a certain amount. Simply put, the loan you receive will typically not exceed the value of what it is secured by. If for example you want to purchase a 100,000 house and have 0 to your name, the LTV will be 100 and will probably not be accepted. If you have 50,000 you can use as a down payment and only require a 50,000 loan, now the LTV is only 50 and much more likely to be accepted.Only when the above two are satisfactory, is an applicants credit score viewed. Even if you have a poor credit score, youll be much more likely to be approved if you have strong cash-flows than if you had weak cash-flows but a strong credit score. With that said, obviously you should be working to keep your credit score high and repaying your debts, but if your goal is to be approved for a loan, then your priorities are to secure high earnings while keeping your spending low, and then worrying about paying back debts on a timely manner. Lastly, this is why budgeting is key. Since having a strong DSCR which again is calculated by taking your total reoccurring income and dividing it by your total reoccurring expenditures is the most important when it comes to loans, reducing your expenditures is the easiest way to improve the ratio you have two ways to improve your ratio - earn more or spend less i.e. dividing by a smaller number vs. dividing with a bigger number. Note however Im not necessarily talking about how much you spend on things like food every month, Im talking about things that appear on your credit report installment loans and credit card usage. This is why PFS emphasizes paying off those pesky loans starting with the highest interest rates. TL;DR cash-flows are a better representation of a persons current financial standing and in order to be accepted for a loan, you must earn enough to support current and the additional expenditure of the monthly repayments. Thus your income and expenditures are more important than what your credit score is. Having a strong credit score will certainly help, but it is objectively less important.  <response>: Youre new and are talking about commercial lending in personal finance. Great credit and willingness to pay more interest can and do make up for lack of income. Assets can work the same way. Poor credit is worst in personal lending then commercial in many cases IE you just cant get a conventional mortgage for 2 years after a chapter 7 BK or did they change it to 3. even with exceptional circumstances exception. Credit history is different then score, you can have a good score because of the total volume of your credit but be considered a bad risk to a particular type of lender. Car loans dislike repos , mortgage lenders dislike mortgage lates and evictions. Car loans , do not always or even generally verify income and they allow for a much greater DTI then mortgages. 