Explanation

Answer Example

To assess the creditworthiness of a borrower, I analyze their credit history, including credit scores, repayment history, and outstanding liabilities. I also calculate their debt-to-income ratio to evaluate their ability to handle additional debt. For businesses, I review financial statements, cash flow trends, and industry performance. For example, I recently assessed a small business loan application and identified strong cash flow but high seasonal fluctuations, recommending a tailored repayment schedule, which lowered default risk. This structured approach ensures a balanced evaluation of risk and repayment ability.