Definition
A measure of how likely you are to repay your debts. Lenders assess this to decide if you qualify for loans and at what interest rate.
What to consider
- Maintain a good track record of repaying debts.
- It’s a key factor in securing favorable loan terms.
- Work on lowering your debt levels to boost your profile.
Real world scenarios
- Olivia’s consistent bill payments and stable job make her highly creditworthy. Lenders offer her lower APRs on loans.
- Raising his creditworthiness becomes Kevin’s priority after being denied a car loan. He repays outstanding debts and sees improved offers in six months.
- Before co-signing, Angela checks her friend’s creditworthiness to avoid potential financial risks if the friend cannot repay.
Related terms
Related Playbooks
Get instant access to all our expert playbooks and 1-1 financial coaching when you join the Bolder Money community. Learn more here.
Credit & Creditworthiness
Master Guide to Credit Card Interest Rate Negotiation
Credit & Creditworthiness
Break Free from Credit Card Overspending: Psychology-Based Solutions
