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COPY: Credit Investigation in Finance

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Questions and Answers

What is verified when an individual applicant is employed in a family-owned firm?

Only the individual applicant

Only the company

Both the individual applicant and the company (correct)

Neither the individual applicant nor the company

What is the purpose of in-house file verification?

To find the borrower's credit score

To determine the borrower's employment status

To verify the identity of the borrower or co-maker (correct)

To check the borrower's criminal record

What should a credit investigator do if they find that the applicant's name is similar to a defendant in a court case?

Pursue the investigation to determine whether the applicant is the same defendant (correct)

Ask the applicant to provide additional documentation

Ignore the information and proceed with the application

Immediately reject the credit application

What is verified in the case of a corporate account?

Both the corporate entity and the owners or stockholders Signup and view all the answers

Who is checked under both personal and trade/business name?

Self-employed borrower Signup and view all the answers

What is the primary purpose of credit investigation?

To validate data about a loan applicant/borrower Signup and view all the answers

What is the scope of in-house file verification?

On all credit applications except those rejected outright Signup and view all the answers

Who is included in the in-house verification process?

The borrower's personal name, known aliases, trade or business name, and spouses Signup and view all the answers

What is the purpose of court case verification?

To inquire against compilation of names of persons against whom collection cases have been filed Signup and view all the answers

What type of information is gathered during credit investigation?

Enough relevant information about the borrower to aid in formulating a sound credit decision Signup and view all the answers

Who may undergo credit investigation?

Third parties intending to establish a business relationship with the bank such as new depositors, other financial institutions, and job applicants Signup and view all the answers