Why might a lender require a borrower’s credit history?

A lender requires a borrower's credit history primarily to understand the borrower’s financial responsibility. This history provides a comprehensive overview of how the borrower has managed their debts in the past, including details about late payments, defaulted loans, and overall credit utilization. The lender assesses whether the borrower has a reliable track record of repaying loans on time, which is crucial in determining the risk associated with lending to that individual.

By evaluating the credit history, lenders can gauge the likelihood that the borrower will meet their repayment obligations in the future. A strong credit history often indicates responsible financial behavior and can lead to better terms on the loan, such as lower interest rates or higher loan amounts. Conversely, a poor credit history may lead to higher rates or denial of the loan altogether, as it suggests a higher risk for the lender.

The other aspects of the question relate to different considerations in the lending process but do not directly pertain to assessing the borrower's financial responsibility. For instance, confirming employment status is more about income verification than financial behavior, evaluating property value pertains to the collateral aspect of the mortgage rather than the borrower’s creditworthiness, and identifying loan types available generally stems from broader criteria beyond just credit history.