Final answer:
A customer must provide income information and undergo a credit check when opening or renewing credit products. Depending on the risk, a cosigner might be required or collateral might be requested.
Step-by-step explanation:
When a customer opens or renews a credit product, such as a loan or mortgage, financial institutions require certain pieces of information. Customers must provide information about their sources of income, and the bank will conduct a credit check to assess their past borrowing and repayment behavior. In some cases, to mitigate the risk of lending, banks might require a cosigner, who is a person or firm that agrees to repay the debt should the original borrower fail to do so. Additionally, banks often request collateral, such as property or equipment, which can be seized and sold by the bank to recover the loan amount if the borrower defaults. These measures are taken to reassure the bank amid imperfect information about the borrower's ability to repay the loan.