You are a loan officer at a bank. An applicant comes to you for a $5,000 loan. Explain why you would want to know that person’s credit history.

Answer:

I would review the applicant’s credit history to see whether they have repaid debts on time in the past. This helps me assess the risk that they may not repay the $5,000 loan and decide whether to approve it and what interest rate or terms to offer.