ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Creditworthiness, simply put, is how “worthy” or deserving one is of credit. If a lender is confident that the borrower will honor her debt obligation in a timely fashion, the borrower is deemed creditworthy. Financial institutions use credit ratings to quantify and decide whether an applicant is eligible for credit.

Detailed explanation-2: -Creditworthiness is determined by several factors including your repayment history and credit score. Some lending institutions also consider available assets and the number of liabilities you have when they determine the probability of default.

Detailed explanation-3: -Your creditworthiness helps lenders determine whether or not to extend new credit to you-it’s a measure of how likely you’ll repay your debt obligations. If you are a trustworthy borrower with a good credit score (at least 670), lenders are more likely to approve you for more favorable terms, like lower interest rates.

Detailed explanation-4: -What is Creditworthiness? Creditworthiness is the opinion of a creditor or lender regarding the ability of a person or business to settle its obligations when due. This assessment extends to the expected future financial condition of the person or business.

Detailed explanation-5: -The base credit scores of the most popular credit-reporting models start at 300. Starting with a score of around 300 is possible only if you’ve managed your finances poorly. You may start to build a credit history or improve your score without using any type of credit.