Borrower Reputation Is Important in Assessing Credit Quality Because

Multiple Choice

Borrower reputation is important in assessing credit quality because

A) good past payment performance perfectly predicts future behavior.
B) preservation of a good customer/FI relationship acts as an additional incentive to encourage loan repayment.
C) FIs only lend to customers they know.
D) customers with poor credit histories always default on their loans.
E) a reputation for honesty is important in credit appraisal.