General economic conditions at the time a loan is made will be taken into account in setting credit standards.

Question

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General economic conditions can have a significant impact on a borrower's ability to repay a loan, and lenders typically consider these conditions when setting credit standards. For example, during a recession when unemployment is high and incomes are stagnant, lenders may tighten credit standards and require higher credit scores or larger down payments to mitigate the risk of default. Conversely, during a period of economic growth and low unemployment, lenders may be more willing to lend and may set more relaxed credit standards.

General Economic Conditions at the Time a Loan Is Made