What is Creditworthiness?
Creditworthiness has to do with the ability of a borrower to pay current debt in a timely manner. Within the context of the ability, several basic factors come into play. An evaluation of the creditworthiness of a borrower involves identifying the presence of resources that may be used to repay debts, the willingness of the debtor to use those resources for repaying debt, and a history of choosing to repay debt obligations in a timely manner. When creditors choose to extend credit to an individual or business, that extension of credit is based on the understanding that the borrower will have resources that can be used to repay the debt. The resources are normally thought of in terms of some type of cash flow. The cash flow may be from income earned from a job, or income that is received in exchange for goods and services provided to clients. Even a cash flow that results from regularly scheduled disbursements from a trust or interest income payments may be considered a verifiable type
