Final answer:
A loan applicant's credit history reflects their willingness to honor debt obligations, and their income indicates their ability to repay the loan. The correct answer is a) willingness and ability.
Step-by-step explanation:
When evaluating a loan applicant, lenders consider two main aspects: the borrower's credit history and their income. The credit history provides insights into the applicant's willingness to honor debt obligations. A borrower with a history of late payments may seem less reliable, affecting the lender's perception of their willingness to repay a new loan. The applicant's income, on the other hand, is an indicator of their ability to repay the loan. This is assessed through income sources, with higher, stable income suggesting a higher ability to fulfill financial commitments.
In the context of the question, the correct answer is a) willingness and ability, as these terms directly reflect the applicant's historical behavior with debts and their current financial capacity to handle new debt.