Creditworthiness is the borrower’s ability to pay off his obligations on a given date. This is one of the main factors that is taken into account when considering a loan application or a loan.
If we want to apply for a loan or for a loan, we should take care of our good creditworthiness. When it is at the appropriate level, then we will be able to get money more easily, even in a higher amount. In turn, when our creditworthiness is not satisfactory, we will meet with a refusal or a bank or other institution will offer us a smaller sum.
How is the creditworthiness calculated?
Many different factors affect creditworthiness. The most important of them is the amount of our income, as well as the value of our obligations, i.e. monthly bills. The difference between income and liabilities is defined as net income, which the bank, SKOK or loan company take into account when calculating the creditworthiness of its client.
It is worth pointing out that the source of income is important. An employment contract is preferred because it is the most reliable form of earnings. This does not mean, of course, that we will not get a loan or credit when we work on a contract for a work or contract of mandate. In these cases, however, we must usually document our income.
Other factors that are taken into account when testing creditworthiness:
• customer age, which is also related to the loan period
• the client’s place of employment, which is related to the stability of the company
• continuity of employment and the time when we last changed our job
• customer’s marital status
• the number of people in the household, which has an impact on the cost of maintaining the household
• credit history and creditworthiness, which are checked in databases such as BIK
Of course, these are just examples of factors, because in reality there are many more. Each bank has its own formula, based on which it determines the creditworthiness of customers, so it may turn out that we can get a loan in one bank, while in the other one we can have problems with it.
How to increase your creditworthiness?
Therefore, the question arises – how can we increase our creditworthiness to get a loan or a loan without a problem? In particular, we must ensure that the bank becomes a more reliable client who is in a good financial position.
First of all, you should think about giving up your credit card and debit account limit, which also decreases our creditworthiness. Let’s clean up existing loans and loans – maybe the smaller ones can be paid off before the time? We can also look for additional sources of income or take a loan or loan with someone close to us. It is also worth mentioning that the credit decision is affected by the collateral presented by us.
When we want a higher sum, let’s remember that it’s easier to get a loan, which will be spread over a larger number of installments.