Definitions for "Compensating Factors"
Evidence of ability and willingness to repay a loan when lacking traditional criteria. This may include consideration of nontraditional employment histories and the use of rent, utility, or medical payment histories.
borrower strengths that mitigate or compensate for a borrower's weakness (i.e.; length of employment, considerable cash reserves, etc.).
Positive factors that are considered by lenders to approve loans to otherwise marginal borrowers.