Creditworthiness is – in a nutshell – the borrower’s ability to repay his liability. To calculate it, the bank will ask about your net income and fixed expenses, such as installments of existing loans, cost of housing, bills, alimony, cost of car maintenance, etc.
Then it will check whether the remaining funds are enough to pay the loan installment. It’s so-called creditworthiness testing. Most banks consider a safe situation when the loan installment does not exceed half of the free monthly revenues of the potential borrower
Creditworthiness – what does the bank take into account?
Although each bank has its own rules for calculating creditworthiness, the following data are usually considered as additional information:
- Marital status – it’s usually easier to take a loan for a marriage than for singles.
- Education – the higher, the better.
- Professional status – do you work in a large, solid company or do we run our own business? In the case of business – the longer the company’s history, the better your chances of a loan.
- Regularity of income – employees on a contract of employment are a much more attractive group of clients for the bank than persons employed on other terms. Due to the irregularity of inflows of people employed on a mandate contract or a specific task contract, banks apply a much more restrictive policy of granting loans.
- Credit history – the bank checks whether we have regularly paid our liabilities. If in the past you had problems with paying financial obligations, you must take into account the refusal to grant a loan or the extension of the loan process.
- Number of people in the household – the lower the costs of maintaining a family, the more willingly the bank will grant you a loan.
- Type and value of the real estate being credited, as well as the status of the investment. For a bank, it is far less risky to finance a finished apartment than the proverbial “hole in the ground”.
The approach to the subject of creditworthiness is now secure, thanks to which the risk of the borrower’s insolvency is significantly reduced – already at the stage of deciding on the amount of the loan.
Calculate your credit standing – how to do it at home?
The secret of the Ponloder is how banking scoring looks exactly. Each bank calculates creditworthiness differently, but tools are available online to help you determine if you have the chance for a loan you are thinking about. If you choose the creditworthiness calculator at SumMoney, you will find out in a few moments whether it is worth submitting the application.
Calculating creditworthiness with a calculator is very simple. Choose the amount, repayment period and interest rate that you can check in our loan comparison. Enter the limits on your credit card, specify your obligations, calculate all monthly installments.
Determine your family’s income and number of members. Click “calculate creditworthiness” and it’s ready! If the result meets your expectations, you can immediately see the offers of banks – just click “find the best loan”.
How to increase your credit standing? Proven ways!
There are several ways to improve and increase your credit standing. First of all, it is worth giving up all credit cards and closing revolving loans in your personal accounts.
Also read: Positive credit history – learn how to build it
Why? When assessing your creditworthiness, the bank also checks your loan installments and whether you have a credit card and account limit. For these products, most often, 3 to 5 percent is added to the amount of monthly liabilities.
A credit card with a limit of PLN 10,000 will be treated as a debt of PLN 300 to 500. It may reduce your creditworthiness by up to several thousand zlotys. If you have other loans and you are unable to pay them back once, you can extend their repayment period, which will reduce the monthly installments.
Loan without creditworthiness – is it possible?
A loan without creditworthiness? Only if you obtain a co-borrower. If you do not have income to get a loan, look for a trusted person who will help you take advantage of the offer. What should you pay attention to when choosing such a solution? First of all, the co-borrower should be a person with creditworthiness in the bank’s assessment.
Good to know: How to check your Retro? Advise!
However, it should be remembered that banks often set the maximum age limit for the borrower. The last installment of the loan should usually be repaid before the age of 70-75. Otherwise, the bank may shorten the repayment period of the loan.
Recommendation T – what does it consist of?
In August 2011, the T. recommendation came into force. This is the decision adopted by the PFSA to regulate credit risk by banks. Applies to all types of loans – mortgage, car and cash, credit cards.
First of all, it introduces the principle that there can be no situation in which the monthly installments of all loans exceed 50% of the borrower’s net income. The only exception are people with above average earnings. In their case, the bar was raised to 65%.