One other dimension to this discussion of “character” with regard to approval of mortgage loans: historically, this was an “dog whistle” word, an excuse on the part of the (usually older white male) bankers to continue the practice of redlining (using geographic maps to determine eligibility for loans that were segregated, usually by race). My understanding is that the Civil Rights Act of 1968 was really the “Fair Housing Act”, and MLK’s economic basis against racism was specifically fighting against institutional economic behaviors such as redlining. In fact, in that sense, credit scores were viewed as an impartial remedy against discriminating against things like race or gender — a metric that was supposed to be an omnibus characteristic that was transparently and equitably applied to all, that would not permit an individual’s discriminatory powers to overrule what a computer put out. And that’s led to some interesting unintended consequences.
So in some ways, we’ve mercifully forgotten what exactly those people in supposedly halcyon earlier days meant by “character”, and thought they meant what we mean today. Would that it always meant “projected ability and willingness to live up to a contract”!
