What does creditworthiness depend on?
Creditworthiness is directly related to the ability to repay the loan on the date specified in the agreement. It is on the basis of its creditworthiness that the bank is able to determine the amount it is willing to lend to a potential borrower.
What determines a company's creditworthiness?
The creditworthiness of a company depends primarily on the amount of income, its sources and its liabilities. It also takes into account the age of the borrower, the number of dependants, marital status, credit history and housing and property status. Before granting a loan, banks analyse the creditworthiness of the company, often taking into account in the calculations the structure of capital, sources of business financing, assets held (defined as assets) as well as the amount of revenues and the amount of costs of the business.
If the economic activity is the only source of income for the borrower, it will be necessary to present the net income earned by the borrower in the last 12 months. In the case of a newly established company, banks may refuse to grant credit because of the theoretically uncertain future of the company. It is worth noting that even in the course of business for less than a year, it is possible to grant credit, it is enough to look around for a suitable bank. When granting a loan, it is also important to pay taxes, contributions, etc. on time and the form of taxation of the entrepreneur.
What does creditworthiness depend on?
The first and most important factor taken into account in the case of individual creditworthiness is undoubtedly the amount of income of the person applying for a loan and the size of his or her existing obligations. The relationship between income received and expenditure incurred in repayment of other loans or instalments, or payment of maintenance and bills, is a key factor in obtaining (or not obtaining) credit. While applying for a loan, the bank will certainly try to have a look at the BIK, i.e. Credit Information Bureau, checking in it the number of commitments even up to 5 years back! When applying for a loan, the source of income (legality of contracts, careful documentation, type of contract), age of the applicant (the greatest freedom for young people), marital status (size and cost of living of the household) and the currency in which the borrower earns income together with the currency in which the loan is to be repaid are also important. Due to the type of contract, it is the people employed on the contract of employment who are more likely to obtain the desired credit. Ideally, the length of time worked with the current employer should be at least 6 months during the process of taking out a loan. Interestingly, creditworthiness also depends on who hired the borrower. If the employer is a state institution or institution, the bank will be more willing to grant credit. In the second place, the persons employed in joint-stock companies and limited liability companies have the greatest chance to obtain a loan.