Final answer:
In the credit approval process, 'customer researches different credit cards' is the phrase that fits best, representing an essential stage where customers evaluate credit card options to apply for. Banks verify income and credit history and may require a cosigner or collateral to approve credit.
Step-by-step explanation:
The phrase that best completes the diagram of the credit approval process from the provided options is likely 'customer researches different credit cards'. During the financial capital market transactions for credit approval, a bank will meticulously evaluate a prospective borrower's credentials, which include scrutinizing forms about the individual's sources of income and conducting a thorough credit check on past borrowings.
Additional reassurances for the bank may come in the form of requiring a cosigner, who is legally bound to repay the loan if the original borrower defaults, or securing the loan with collateral, which can be repossessed and sold off should the borrower fail to repay the loan. The process aims to mitigate the risk financial institutions face due to imperfect information about repayment probability.