Home Financial Tips How to Determine Credit Worthiness as a Customer

How to Determine Credit Worthiness as a Customer

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How to Determine Credit Worthiness as a Customer

Creditors extend as much credit to a customer who can afford and as much as they can afford. 

Therefore if you’re a customer who can afford to pay for your product then you’re considered to be creditworthy.  

The challenge for both the creditor and customer is figuring out how much a customer can afford. This may not always be as simple as creditworthiness isn’t static in today’s business world it can change rapidly. This is why a customer’s creditworthiness should be monitored throughout the customer life cycle. 

For individuals, creditworthiness is determined primarily by repayment history. Missed or late payments are kept on record. So are court judgments for non-payment of debts, bankruptcies and individual voluntary arrangements. Decisions are also influenced by anyone financially linked to the individual. For example if they’ve a shared credit account, the other person’s creditworthiness is also taken into account. 

A customer can also determine their credit worthiness by. 

Checking their credit report 

You can use any of the major credit reporting agencies like TransUnion, to provide predictive and performance based credit scores. That said, there’s a cost to these reports and not all credit information is correct. 

Or by evaluating yourself 

Do you not only pay off your account, but that do you do so in a timely manner. Knowing if you’d consider yourself to be a reliable responsible spender, it’s basically free and good to know your financial character as a person in how you meet your debt obligations. Do this by looking at how good are you with your own personal finances. No one would know this answer better than you. 

 

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