Before Giving a Loan to a Customer, a Lender Examines the Customer’s Credit Report. Which Explains Why the Lender Examines the Customer’s Credit Report?

Before Giving a Loan to a Customer, a Lender Examines the Customer’s Credit Report. Which Explains Why the Lender Examines the Customer’s Credit Report?

A. To Determine if the Customer is a Likeable Person

B. To Determine the Customer’s Income

C. To Determine the Customer’s Job Title

D. To Determine if the Customer is Likely to Pay Back the Loan

The correct answer is: D. To Determine If The Customer Is Likely To Pay Back The Loan.

The credit report provides crucial information about the customer's credit history, payment habits, outstanding debts, and other financial obligations. By analyzing this data, the lender assesses the customer's creditworthiness and determines the likelihood of the customer repaying the loan. This evaluation helps the lender make informed decisions about granting the loan and mitigates the risk associated with lending money. The credit report serves as a vital tool for the lender to make a reliable judgment about the customer's ability to meet their payment obligations in the established timeframe.