answersLogoWhite

0

A lender has to ensure that the borrower has the means to be able to pay back the debt from taking the loan. Credit ratings, as they are commonly called, are a scoring system used to determine a persons (company or country) ability to repay the debt. In addition, a lender has its own set of scoring an individuals worthiness. The creditors commonly look at a persons assets, liabilities, debts and history. As a side note, it is very important for a ceditors to assess the riskiness of lending to a person. A main cause of the recent financial crisis and US housing bubble is ceditors giving almost 100% loans to people who do not have the means to pay back the debt.

User Avatar

Wiki User

15y ago

What else can I help you with?

Continue Learning about Finance

What is the importance of viability study?

A viability study is crucial as it assesses the feasibility and potential success of a project or business idea. It evaluates various factors, including financial, market, technical, and operational aspects, helping stakeholders make informed decisions. By identifying potential risks and challenges early on, a viability study can save time and resources, ensuring that investments are directed towards projects with the highest likelihood of success. Ultimately, it serves as a foundational tool for strategic planning and risk management.


What Potential sources of error in research design?

Survey error is the extent to which findings from the survey sample differ from those of the population of interest. The large nationally representative surveys discussed here are designed to minimize error. Nevertheless, it is impossible to eliminate all of the multiple potential sources of error. Investigators must identify and consider how potential survey error can bias the results of their analyses. Statistical strategies can minimize the impact of these potential sources of error on study findings.


Sample of finance thesis title in the Philippines?

Does Market Timing have a Persistent Impact on Capital Structure?The Performance and Risks of the Convertible Arbitrage StrategyIs the Efficient Market Hypothesis challenged by Stock Market Indexes Crossing Milestones? - A Behavioural Study


What subjects do you need to study to be a businessman?

busnessmen need to study trading


Advantage of cross sectional study?

advantage of cross sectional study?

Related Questions

What does study habits affect study performance?

All study habits affect performance! Here's a good link.


How does being gay affect military performance and morale?

Study after study has shown that being gay has absolutely no effect on performance and morale.


What is a Quantitative Impact Study?

A Quantitative Impact Study is a comprehensive analysis that measures the potential financial impact of a specific event or regulation on an organization or industry. It involves using quantitative models and data to assess the potential outcomes and implications of various scenarios in terms of costs, revenues, and overall financial performance. The goal is to help decision-makers understand the potential consequences and make informed choices.


What has the author Mohammed Lutfi Al-Ja'fari written?

Mohammed Lutfi Al-Ja'fari has written: 'Stock market valuation of company performance and growth potential: a study of value creation and investment'


When you study the motive of a primary sources writer you are looking into issues of potential?

When we study the motive of a primary source's writer, we're looking into issues of potential:


When you study the motive of a primary source's writer we're looking into issues of potential?

When we study the motive of a primary source's writer, we're looking into issues of potential:


How would a biologist help improve a tennis players performance?

A biologist could study the tennis players performance and think of ways to improve their performance. Because they study living things, such as humans... they can suggest ways tennis players can improve.


What are some tips for help with Exam performance?

Eating healthy could help you to concentrate better and help you focus on your study, and study for longer. For more information see Exam Performance link.


What is the study of kinetic and potential energy?

Kinematics. A subsection of mechanics.


What are potentials in marketing resrech?

The market potential research is the study of the potential of a given market. This is the research carried out to determine the potential demand of a given good or service.


The absence of random assignment in any study?

Allows for potential confounding


What are the average lumosity scores of participants in the study?

The average Lumosity scores of participants in the study were calculated to determine their cognitive performance levels.