How Do You Determine Credit Worthiness?

Creditworthiness is determined by your credit score and credit report. These things will reflect your past borrowing history, payments, credit accounts used, overall debt load, and credit card usage, among other things. If all of these things are in good standing, then your credit score should be good and you’ll be considered “creditworthy.”

Creditworthy is simply a word that’s used to describe how trustworthy you are when it comes to your finances. Do you pay your bills and loans on time? Do you keep your credit card balances low and pay them off by the due date? These things all play into whether or not you’re considered to be creditworthy. 

So how do you become trustworthy in the eyes of lenders if you have a low credit score? Well, the best thing you can do is create a plan to improve your credit score. If you can boost your credit score you can become eligible for more loans and financial products, and you may be offered better interest rates and more favorable loan terms. 

Here’s a good list of things to start focusing on to improve your credit score over time: 

  • Start making all your payments on time. And we mean ALL of them. 
  • If you have any extra cash each month, put it toward outstanding loans.
  • Use your credit cards less, and always pay them off before the end of each billing cycle.
  • Don’t take out any new loans or credit products if you already have several.

The best first step you can take is to assess your current financial situation. Find out your credit score, and check your credit report. If you find any mistakes on the report then you can alert the credit bureau and have them removed. 

Next, create a budget. List your complete monthly income and then list all of your monthly expenses. Subtract the expenses from the income and see what’s leftover. This extra amount can be put toward any outstanding debts you need to pay off. Paying them off sooner will potentially boost your credit score.

Start with these steps and stick to them. Eventually, you’ll see your score improve.

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