What is meant by creditworthiness
Creditworthiness is simply the ability or repayment ability of the borrower. In other words, through a number of factors that affect our creditworthiness , we are able to determine (potentially) whether we can afford to pay back the loan. This is how every bank approaches it. Before he decides to credit someone, he will first check whether he can afford a loan. To this end, it will verify both its solvency (financial position) and credibility (credit history).
Financial condition of the borrower
By many understood only in terms of earnings, it does not quite correspond to the facts. The financial situation is understood by the bank much broader than just in terms of income. Of course, it is one of the components of our creditworthiness and the bank will check both the source and the amount of our income before issuing a credit decision. Then he will look at us in terms of our expenses. Of course, these are fixed costs that we incur invariably every month. These include the cost of rent, the cost of any rental, the cost of fuel for the car, the cost of car use, electricity, gas, water, telephone, Internet. However, our expenses are not just fees. There are also other obligations in the form of currently repaid loan installments or non-bank loans, as well as the possible cost of maintenance that we have to pay. Generally, the category of expenses and obligations includes all fees that we pay each month.
When we calculate revenues and expenses and compare them with each other, we will be able to tell what the difference is. If the revenues are higher than the expenses, we will determine how much money is left in the household budget, which we can spend on other purposes, i.e. for repayment of the installment of a new loan. What conditions must be met to obtain a consolidation loan?
The credit history is nothing more than the history of our financial liabilities, both in the bank and in non-bank institutions. The bank verifies it each time the loan application is submitted. It is required by law, so it is not possible to skip this step. Thanks to this, it will verify whether we are reliable clients and whether we fulfill the concluded contracts. If our history in BIK is positive, we have a good chance of a bank loan. If we do not pay our liabilities on time, we have outstanding loans past due, and we also have little or no chance of getting a loan. What is noteworthy is the fact that with higher liabilities, the bank will treat a person whose credit history is empty (he never took any credit) on a par with a person with a negative history in BIK. This is because it cannot be verified and therefore treats it with caution and does not give credit without foundation.