Interdependency of different finance products to know creditworthiness of borrower

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Accepted Answer

The interdependency of finance products helps assess the creditworthiness of a borrower.

Different finance products, such as loans, credit cards, and mortgages, provide a comprehensive view of a borrower's financial behavior.
Analyzing the borrower's payment history, credit utilization, and debt-to-income ratio across various finance products helps determine their creditworthiness.
For example, if a borrower consistently makes timely payments on their credit cards, it indicates responsible financial behavior and enhances their creditworthiness.
On the other hand, if a borrower has a history of defaulting on loans or maxing out credit cards, it raises concerns about their ability to manage debt.
By considering the interdependency of finance products, lenders can make more informed decisions about extending credit to borrowers.

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