When applying for a loan, you often hear the statement that banks must check your creditworthiness. There are then questions about the history so far, about paying off installments, the bank checks your account in BIK. All this to assess whether your loan application is acceptable and whether your credibility is not low.
What exactly is creditworthiness, does it have a real impact on the loan decision and how is it assessed?
We have prepared for you the 5 most important facts about this issue, so as to dispel the most popular doubts.
Credibility is your reputation differently
Imagine a person who incurs unpaid debts. Buys all products in installments and exceeds the limit on the credit card. Most likely, we would not like to borrow her money ourselves, because the risk of not giving back the amount is too big for us. In short, such a person is unreliable in our eyes. Creditworthiness works exactly on the same principle. If we want our reputation to be immaculate, we must, for example, pay our debts on time.
Credibility information is needed by various institutions
Of course, banking institutions and the lender, who assesses whether you can entrust you with further financial obligations. In addition, there are various types of non-bank institutions (e.g. leasing companies) have an insight into your BIK history.
Credibility is determined by scoring
Scoring BIK is a special five-star scale, awarded by the BIK system. The more stars, the greater the credibility, and thus, the greater the chance of receiving a loan. Each bank has its own scoring model, and often includes history of all cooperation with the bank, credit stories, customer demographics.
Creditworthiness is different from credibility
Again, let’s imagine that Mr. X earns $ 2,000 net, and Mr. Y earns $ 8,000 net. They both take exactly the same credit because both Mr. X and Mr. Y have great creditworthiness. They both paid the installments on time and they both did not exceed the credit card limit. The only difference between them is that Mr. X, who earns less, has less creditworthiness than Mr. Y, who earns more. This means that his repayment possibilities are smaller. In addition to income, creditworthiness is also influenced by the size of the family and the number of liabilities incurred.
You can change your credibility
… but it requires many steps. Erasing or changing credibility with one click is not possible, so we do not believe the people who promise us that. We affect our credibility. Timeliness, diligence and not applying for many loans at once will have a positive impact on your image in BIK.
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