What is creditworthiness?

Creditworthiness is an assessment of an individual or a company's ability to repay any money borrowed on schedule.

Where have you heard about creditworthiness?

If you've ever taken out a loan or applied for a mortgage, you'll have heard about creditworthiness.

What you need to know about creditworthiness.

Credit Reporting Agencies are firms that collect and hold information about the credit history of individuals and businesses. Experian, Eqifax and TransUnion are names that you might be familiar with if you have requested a copy of your credit report. They provide information to lenders about a borrower's credit history.

Lenders gather data from Credit Reporting Agencies and look at a number of different factors to work out a borrower's creditworthiness. They'll most likely look at the borrower's repayment history, income, financial obligations, employment status, existing debt and available assets.

The lender will use this information to build a picture of the potential borrower's credit score. From this they'll be able to decide whether the borrower is worth the risk of lending them money, how much they can risk lending them and at what interest rate.

Find out more about creditworthiness.

Read our definitions on credit rating, debt and bankruptcy.