Final answer:
Financial documents for borrowers should be saved securely and systematically by financial institutions. This includes loan agreements, credit checks, and collateral documentation, which are essential for evaluating creditworthiness and managing risk.
Step-by-step explanation:
Any financial documents for your borrower should be saved in a secure and systematic manner that ensures easy accessibility for future reference and compliance with legal requirements. In the context of banking and financial institutions, it's crucial to maintain thorough records of transactions, including loan agreements, collateral documentation, and credit checks. Banks appraise a borrower's credibility through various means such as assessing income sources, conducting credit checks, requiring cosigners, or taking collateral to mitigate the risk associated with the information asymmetry in lending. Proper documentation of these procedures helps banks manage and review the financial agreements more effectively.