It is referred to an investigation that involves contacting credit references or corresponding with a credit beureau to verify information on a credit application.
Click on the arrows to vote for the correct answer
A. B. C. D.C
The answer to this question is C. Credit investigation.
A credit investigation is a process used by lenders or financial institutions to verify the information provided by a borrower in a credit application. This process may include contacting credit references, such as previous lenders, or corresponding with a credit bureau to obtain a credit report on the applicant. The purpose of a credit investigation is to assess the creditworthiness of the borrower and determine the risk associated with lending them money.
Credit references are typically individuals or companies that have previously extended credit to the borrower, such as a credit card issuer or a mortgage lender. When a lender contacts these references, they are seeking information on the borrower's payment history, credit utilization, and overall creditworthiness. This information helps the lender to determine whether the borrower is likely to repay the loan on time and in full.
A credit bureau is a company that collects and maintains information on individuals' credit history and behavior. When a lender contacts a credit bureau, they are seeking a credit report on the borrower. A credit report includes information on the borrower's credit accounts, payment history, outstanding balances, and other relevant credit information. Lenders use this information to assess the borrower's creditworthiness and determine whether to approve the loan application.
Credit scoring is a process used by lenders to evaluate the creditworthiness of a borrower based on a numerical score. The score is based on various factors such as payment history, credit utilization, length of credit history, and types of credit used. Credit scoring is often used in conjunction with a credit investigation to assess the risk associated with lending money to a borrower.
Finally, a credit line refers to the maximum amount of credit that a lender is willing to extend to a borrower. This is typically based on the borrower's creditworthiness and financial situation. A credit line may be used for various purposes such as financing a business, purchasing a home, or paying for unexpected expenses.