Within two years, I expect to have 6 months worth of bills in my emergency fund, with the ability to tap my nascent 401K for a loan if the need arises.
Fortunately, I'm a TX resident with about 30% equity in my home.
Mortgage lenders need to do their due diligence and make a credit decision based on common sense and sound financial data...one size doesn't fit all.
The more bills I paid off, the lower my scores went. Got down to a house payment and went to buy a car (used) and my score had dropped from the time I’d bought the house.
In the old days there was not such thing as FICO. A loan processor verified your funds, your job and your bills. Then the underwriter decided if you could get the loan. There was still some fraud but it wasn’t government sanctioned.