Credit risk loans analysis

How do you evaluate the risk of a loan?
How to assess the risks to a Loan Application
1. The Applicant's Financial Information
2. The Applicant's Creditworthiness
3. The Applicant's Character
4. The Applicant's Ability to Repay the Loan
5. The Purpose of the Loan
Types of risks in lending
Credit Spread Risk: Credit spread risk is typically caused by the changeability between interest and risk-free return rates.
Default Risk: When borrowers cannot make contractual payments, default risk can occur.
Downgrade Risk: Risk ratings of issuers can be downgraded, thus resulting in downgrade risk..
The credit score serves as a risk indicator for the lender based on your credit history.
Generally, the higher the score, the lower the risk.
Credit bureau scores are often called "FICO^\xae Scores" because many credit bureau scores used in the U.S. are produced from software developed by Fair Isaac Corporation (FICO).

How do you evaluate the risk of a loan?