Do mortgage credit scores really work? Can a lender accurately predict whether you're likely to miss a couple of mortgage payments some time in the future, and therefore charge you a higher interest rate or fees on your new home loan? Or deny you a mortgage altogether?

Federal government researchers have just completed the most comprehensive study yet on these questions, and they've arrived at this answer: Like them or not, credit scores work. If you have an extremely low credit score, the statistical probability is greater that you will default on payments, compared with someone who has an extremely high score.

But your credit score is not your destiny. To the contrary: Researchers for the Federal Reserve Board found that most mortgage applicants with low scores do not default. They pay off their loans like everybody else, despite previous dents in their credit histories.

But of the total number of homeowners who ultimately do fall into delinquency each year - and head for foreclosure - individuals with low credit scores are disproportionately represented.

The new study, published in the Federal Reserve Bulletin, focused on one of the fastest-growing mortgage trends of this decade: the use of risk scores at the loan application stage to evaluate your likely future performance as a borrower.

The scores are based heavily on information from your computerized credit files maintained by the three national consumer

credit repositories - Equifax, TRW and Trans Union. Your lender gets to see your credit score, but typically you don't. And you have no legal right to demand to see your score, according to the Federal Trade Commission.

The increasing use of scores by mortgage lenders in the past year has drawn criticism from some consumer advocates who say they are inherently weighted against lower-income borrowers, renters, minorities and first-time purchasers - all of whom could be denied the opportunity to buy a home because their scores don't measure up.

The Federal Reserve study made use of huge pools of private, proprietary data on individual mortgage borrowers that have never before been opened to public view. Portions of the data were made available by Equifax Credit Information Services. Freddie Mac, the huge national mortgage investor, also provided proprietary information about the relationship of credit scores to mortgage-payment behavior on single-family home loans it purchased in the first half of 1994 and tracked through 1995.

All the data was cleansed of information that would identify specific homeowners or street locations of properties. Researchers did have ZIP codes, loan size and down-payment information, allowing them to draw conclusions about likely income levels and rough geographic locations.

By examining how borrowers with differing credit scores at application performed on their monthly loan payments over time, the researchers found that:

-- Consumers with low credit scores accounted for only 1.5 percent of new conventional fixed-rate mortgages made in one large sample, but they produced 17 percent of the total numbers of loans that went bad.

-- Home buyers with high incomes don't repay their mortgages much more reliably than buyers with lower to moderate incomes. Borrowers with household income below 80 percent of the median income for their metropolitan area represent only slightly higher risks than the wealthiest borrowers - those with incomes more than 120 percent above the area median.

-- The real keys to predicting future foreclosure, said the researchers, are low down payments combined with low credit scores. The foreclosure rate for individuals who put little down and carry subpar credit scores is almost explosive: 50 times more of them go to foreclosure than borrowers who put 20 percent down and have high credit scores.

-- Nationwide, about one of five individuals carries a low credit score - low enough to create difficulties in obtaining a new loan or refinancing a mortgage. But for reasons the researchers couldn't explain, certain regions of the country seem to have more low credit-scorers than others. For example, just 18 percent of individual New England borrowers and about 16 percent of Midwestern borrowers score low, whereas 26 to 28 percent of the borrowers in some Southern states carry subpar scores to the application table.

Conversely, 71 percent of Midwestern borrowers are high credit-scorers vs. 59 to 61 percent in parts of the South. The Pacific and Mountain states track the national average - about 20 percent low scorers, 67 percent high scorers.

-- Higher-income borrowers are considerably more likely to carry high credit scores (75 percent) than individuals from lower-income areas (56 percent). But the fact remains: Whatever your income as a home-loan applicant, the odds are still strong that you carry a high credit score. And the odds are overwhelming that you'll pay back your mortgage on time - unless, that is, you score low and put very little into the deal.

(Copyright, 1995, Washington Post Writers Group)