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?

<p>Both the corporate entity and the owners or stockholders (C)</p> Signup and view all the answers

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

<p>Self-employed borrower (C)</p> Signup and view all the answers

What is the primary purpose of credit investigation?

<p>To validate data about a loan applicant/borrower (A)</p> Signup and view all the answers

What is the scope of in-house file verification?

<p>On all credit applications except those rejected outright (B)</p> Signup and view all the answers

Who is included in the in-house verification process?

<p>The borrower's personal name, known aliases, trade or business name, and spouses (B)</p> Signup and view all the answers

What is the purpose of court case verification?

<p>To inquire against compilation of names of persons against whom collection cases have been filed (A)</p> Signup and view all the answers

What type of information is gathered during credit investigation?

<p>Enough relevant information about the borrower to aid in formulating a sound credit decision (C)</p> Signup and view all the answers

Who may undergo credit investigation?

<p>Third parties intending to establish a business relationship with the bank such as new depositors, other financial institutions, and job applicants (C)</p> Signup and view all the answers

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