Creditworthiness – how to estimate it?

Virtually everyone can apply for a cash or mortgage loan, but the bank will not give it to everyone. Banks create their own credit policy and grant loans only to reliable customers who have adequate creditworthiness . What is this ability and how can we assess it?


Creditworthiness – assessed by banks on the basis of credit history

Creditworthiness - assessed by banks on the basis of credit history

Before the bank decides to grant a loan, our creditworthiness is assessed, i.e. the borrower’s ability to repay a given loan amount with interest over a set period of time. The amount of credit granted and repayment conditions depend on our creditworthiness. Our credit history is also important, for which we can contact the Credit Information Bureau (we will receive such a report once every six months free of charge). In assessing our credit standing, the loan calculator tool commonly available on the Internet may be misleading.


Loan calculator – may be misleading

Loan calculator - may be misleading

A publicly available loan calculator supposedly allows you to estimate how large a loan you can get in a bank. On its basis, we can define the maximum and safe amount of the loan installment we can afford, and adjust the size of the loan to our home budget. Using the online calculators also allows you to calculate the monthly installment of the loan you intend to take and check if our earnings are sufficient. However, we should remember that based on our calculations we will not be granted a loan. The creditworthiness calculator only provides us with approximate calculations (often unreliable and useless), which can differ significantly from those made by bank analysts. Therefore, we suggest using the services of experienced experts who perform free analyzes for clients, thus allowing you to choose the best offer of the bank.


Loan and loan calculator

Loan and loan calculator

If we want to know whether we can afford a cash or mortgage loan, the creditworthiness calculator will not answer this question. It can only mislead us, which will unnecessarily waste our valuable time filling in long forms, providing cursory information, such as net income, the number of members residing in one household, the length of the loan period. Based on this data, the loan calculator will not help us to accurately determine our creditworthiness . On the other hand, experienced brokers with knowledge and appropriate tools (often unavailable to individual clients) will help in free analysis, preparation of relevant documents, and then in filling in applications, including signing the contract.


Creditworthiness – summary

credit loan

In summary, all comparison tools, creditworthiness calculators are tools that are of little value and often provide misleading information. Let’s trust the knowledge and experience of others and check your creditworthiness by contacting a broker equipped with appropriate instruments. In this way we will get free analysis and reliable information on possible loan options in the bank.

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