You are a loan officer at a bank. An applicant comes to you for a $5,000 loan. Explain why you would want to know that person’s credit history.
One thing I would be looking for is their service of previous loans. I would be looking for certainty that the borrower in question repaid their previous loans on time. In consideration of timely payments, I would be looking at whether they have ever defaulted any monthly or other regular payment of their previous loans.
I would also be seeking knowledge of whether they owe other lenders or not. This would inform how they are servicing their current loans if they have any.