Underwriting is the process by which the lender decides whether an applicant is creditworthy and should receive a loan. An effective underwriting and loan approval process is a key predecessor to favorable portfolio quality, and a main task of the function is to avoid as many undue risks as possible. When credit card loans are underwritten with sensible, well-defined credit principals, sound credit quality is much more likely to prevail.
Source: Indeed
*Increasingly organizations are challenging the paradigm of conventional loan underwriting, experimenting with other criteria for lending, including considerations like impacts on community health and relationship-based models.
