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What is creditworthiness?

By: Kate Anderson | 28th May 2021

When it comes to applying for a credit card or a loan, your creditworthiness can play a huge role. But what is creditworthiness and how does it really affect you?

We break down what creditworthiness is, what factors a lender considers and how you can improve your credit status.

What is creditworthiness?

The definition of creditworthiness is the extent to which a person or company is considered suitable to receive financial credit. Basically, a lender uses your creditworthiness to determine whether they think you will repay them if they lend you money.

If they decide that you will, then congratulations! You are creditworthy. 

What factors do lenders consider?

Lenders evaluate your creditworthiness based on a review of your past handling of credit and debt. They also consider your ability to afford the agreed repayments.

They tend to take the following into account:

The key thing to remember when thinking about creditworthiness is that no two lenders will assess information in the same way. So you may have a solid credit score, but there is no guarantee of a successful application. It is more about whether that particular lender thinks you are a safe bet.

How can you improve your creditworthiness?

Worried about your creditworthiness? There are some things that you can do to improve your situation.


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