Lending and Underwriting

Ability to repay means the lender's judgment about whether the borrower can realistically handle the requested debt.

Adverse action notice means a notice explaining that a credit request was denied or approved on materially less favorable terms.

Approval odds means the estimated likelihood that a borrower may be approved for a credit product under current conditions.

Creditworthiness means a lender's overall judgment about how likely and able a borrower is to repay as agreed.

Debt service ratio means a lender's measure of how much income or cash flow is consumed by required debt payments.

Debt-to-income ratio compares recurring debt obligations to income to show how stretched a borrower's cash flow may be.

Income verification means the lender's process for confirming the borrower's earnings before approving or pricing credit.

Loan application means the formal request a borrower submits when asking a lender to extend credit.

Manual review means a human lender review of an application rather than a fully automated approval or denial.

Preapproval means a stronger early lender signal that a borrower appears to qualify, subject to final verification and conditions.

Prequalification means an early credit estimate suggesting that a borrower may fit a lender's basic criteria.

Risk-based pricing means the lender changes pricing terms based on how risky the borrower appears.

How lenders judge capacity, risk, pricing, and approval strength before opening credit.

Underwriting means the lender's process for evaluating risk before approving or pricing credit.