What does the term redlining refer to in lending?

The term redlining refers to the practice in lending where loans are denied based on the geographical location of a property, particularly in certain neighborhoods that have been deemed high-risk, often due to racial or economic factors. This discriminatory practice arose from the policies and practices of lenders who would outline areas on maps using red ink, indicating those neighborhoods where they would not invest or issue loans, regardless of an applicant's financial qualifications. This had significant historical implications, contributing to systemic inequalities in access to capital and homeownership, impacting particularly marginalized communities.

In this context, the other options focus on individual characteristics such as credit score, income, or specific loan types, which do not capture the geographical and systemic nature of redlining. Therefore, the correct understanding of redlining is centered around the denial of loans based on the location of the property being financed.