A potential loan customer wants to borrow $4 million to purchase and manage a strip mall with a pizza restaurant, crafts store, and office supply store. The loan officer takes the following steps (not necessarily in this order) to assess the creditworthiness of the borrower.

The loan officer takes the following steps (not necessarily in this order) to assess the creditworthiness of the borrower:

- Run a credit report using any of the major credit reporting agencies like TransUnion, Experian or Equifax.

- Obtain accounts receivable aging reports.

- Check references.

- Conduct a gut check using creative investigative methods.

Explanation:

There are some factors that can affect creditworthiness or credit score such as: bill payment history, which comprises 35 percent of the total credit score and the most important factor in calculating credit scores, the level of debt, credit history age, types of credit on a report and number of credit inquiries, credit utilization, length of credit history. There are five "C's" to consider during a credit risk assessment: character, capacity, capital, condition, and collateral. Whether a sale is a domestic or international transaction.

The main factor lenders consider in determining a person's creditworthiness is investigation of a person's income, current debts, personal life, and past history of borrowing and repaying debts, capacity to pay, character, and any collateral you may have for loan guaranteed only by a promise to repay.