Creditworthiness

Creditworthiness is an assessment of a person's or entity's ability to repay borrowed money. It considers factors like credit history, income, existing debt, and payment behavior. Lenders use this evaluation to decide if they will extend credit, such as loans or credit cards, and often at what interest rate. A higher creditworthiness suggests responsible financial behavior and a lower risk for the lender, while lower creditworthiness indicates potential challenges in repayment, which may result in denial of credit or higher borrowing costs. Essentially, it reflects how reliable a borrower is seen to be.