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malfutka [58]
3 years ago
12

Why are job security, credit history, and debt-to-income ratio so important to lenders when considering people for loans?

Mathematics
1 answer:
yaroslaw [1]3 years ago
5 0

These are important parameters that give signals of an individual's ability to repay the loan. This is an indication of the financial health and profile of the payer, which serves to give lenders insight into the borrower's conduct and repayment potential. Thus, the more information lenders have about borrowers, the lower the risk of default. Banks often use all this information and more when it comes to lending.

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