Credit Worthiness

Credit Worthiness refers to a lenders appraisal of a borrower’s financial stability. Lenders will assess a borrower’s earnings, employment history, credit history, and perhaps the borrower’s collective assets. Some borrowers will take steps to “clean up” their credit report by paying off certain outstanding debts or closing credit cards or lines of credit so that they can appear more credit worthy. Credit worthiness along with a borrower’s debt-to-income ratio and the loan to value ratio are the key factors for a lender in determining the terms of a loan.