Which factor reflects a borrower’s history of managing credit and is crucial for mortgage approval?

The factor that best reflects a borrower's history of managing credit and is crucial for mortgage approval is the credit score. A credit score is a numerical representation of an individual's creditworthiness, derived from their credit history, including their payment history, the amount of debt owed, length of credit history, types of credit used, and new credit inquiries. Lenders use the credit score to assess the risk of lending money, as it provides insight into how reliably a borrower has managed their credit obligations in the past. A higher credit score generally indicates that the borrower has a solid credit history and is less likely to default on a loan, making it a key consideration in the mortgage approval process.

On the other hand, while employment history is important for demonstrating income stability, it does not directly reflect credit management. Existing loans can indicate financial obligations but do not provide a comprehensive view of credit behavior. The loan amount is merely a figure representing the mortgage's size and does not relate to the borrower's credit management history. Thus, the credit score stands out as the primary metric related to a borrower’s credit history.