What is creditworthiness?

It does not always have to happen that we will need additional funds to achieve the goal or solve the problem. But if so, what to do, what rules to follow in our daily lives when making payments, or making further commitments to determine that we are credibly credible?

What is creditworthiness?

What is creditworthiness?

This concept is very broad and of great importance for a future loan applicant. It quite accurately determines the level of customer reliability regarding the timely repayment of commitments he had in the past. This is defined in great detail in terms of credit history and liabilities, even the smallest ones. The second aspect of creditworthiness is a situation that illustrates how the customer was able to cope with all difficulties encountered when paying off liabilities. Financial institutions and banks will assess credibility precisely by the way we pay liabilities, and in particular our diligent approach to loan repayment. This assessment will also include any additional, valuable information that banks obtain, inter alia, from the Credit Information Bureau.

How to build your creditworthiness?

How to build your creditworthiness?

First of all, we should start with a diligent approach to paying off our credit obligations, even if they are minor. There should be no delays in repayment terms, this will ensure transparency and reliability in the client’s approach to the obligations incurred. And this attitude is favorable for banks and willingly cooperate with this type of clients – i.e. they grant loans. And there are many additional factors that are analyzed when assessing creditworthiness. Information such as the number of children you have or the amount of income you get will answer the question, as a starting point, whether we can afford a loan with such creditworthiness. To sum up:

  • make sure that the rating in the eyes of the Credit Information Bureau is the best
  • pay off obligations on time
  • incur obligations only in the amount we can afford, even if we have the greater capacity – always reason will be a good factor here, which we should activate.
  • if possible, save money to pay your debts if needed and to maintain your creditworthiness by paying your debts as planned

What affects our creditworthiness?

What affects our creditworthiness?

Each bank or financial institution has its own scoring model prepared, i.e. how it determines the creditworthiness of its clients. And the relationship is as follows, the higher the loan amount we apply for, the more demanding scoring mechanisms the bank uses. But let’s get to the details. What ultimately creditworthiness the Customer will have depends on the credit history built, but also on the history of cooperation with a given bank or current creditworthiness. Added to this is such obvious information as age, level of education, type of industry in which the client works. All this has a global impact on our creditworthiness, and its quality will directly translate into the possibility of taking out a loan or blocking it. A simple example can be the fact that the client has high income, but he repays liabilities late, then there is a doubt for the bank or institution that is testing its credibility.

Ways to maintain high creditworthiness.

Ways to maintain high creditworthiness.

A willingness to repay the loan is very important information for the bank. To ensure and maintain high BIK scoring, i.e. high creditworthiness, you should look around people we know and know their behavior patterns when paying back loans. We will also learn from them about the level of creditworthiness, and if it is high, all you have to do is duplicate your behavior. And this is already the first key to success. Another issue should be knowledge of the rules for processing credit data. Banks and institutions have various databases in which they collect a range of information about customers, including consents granted to data processing. It’s good to know them and use them to manage your creditworthiness. And the last important element is the ongoing analysis of the correctness of our credit data in databases. The customer always has the right to rectify data, and to amend or change it, if the facts have changed. Let’s keep this in mind.

The company’s creditworthiness

The company

It is a situation similar to an individual customer. The banks approach the credibility of the company as a whole in a similar way. Therefore, the company’s income and history of its cooperation with banks as well as the credit history are analyzed in this case. You cannot ignore such important information as the period of the company’s existence on the market. And if we look at young enterprises just entering the market, their creditworthiness is obviously very low compared to companies that have been on the market for longer.