Final answer:
External sources for verifying a borrower's credit application information include credit checks, income verification, requiring a cosigner, collateral, and government monitoring information – all within privacy legislation limits.
Step-by-step explanation:
Within the constraints of privacy legislation, external sources that could be included to verify information provided by a borrower in a credit application include conducting a credit check on the individual's past borrowing and examining the borrower's income sources. Lenders may also require a cosigner, who is legally obligated to repay the loan if the original borrower does not. Furthermore, requiring collateral, such as property or equipment, can secure the loan since the bank could seize and sell these assets if the loan isn't repaid.
It's important to only provide the minimum information requested by sources, to question the use and access to such information, and to monitor your credit history to protect against identity theft.
Additionally, the lender may gather government monitoring information under various federal laws to ensure compliance with fair lending practices without discrimination based on the provided, or not provided, ethnicity, race, or sex indicators of the borrower.