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What Is Creditworthiness and Are You Credit Worthy?

Written by - Jacaranda Team

May 6, 2015● 2 minute read●

If you’ve ever applied for any loan, someone along the line will have looked into your creditworthiness.

Have you ever wondered what a finance provider such as ourselves looks for when we assess your application for one of our super quick personal loans? We take a look at the factors that make up what we determine to be a creditworthy applicant.

So what is creditworthiness?

The Oxford Dictionary’s definition of ‘creditworthy’ is simple: “(Of a person or company) considered suitable to receive credit, especially because of being reliable in paying the money back in the past.”

Creditworthiness is the assessment of an applicant to determine the likelihood that the applicant will default on debts. Creditworthy individuals are considered to be a ‘good risk’. They’ll have a track record of managing and repaying bills or debts on time.

What do we look at?

Credit file and past credit history

We’ll look at your credit file (your history of credit applications and interactions) to see if you qualify for a loan, including loans for bad credit. You can ask to see a copy of this file to know where you stand. This is also a good option to ensure your information is accurate. The credit reporting bodies we use are:

Veda Advantage Australia

Experian Australia

Your income

It’s not in any way mandatory that you’re earning an excessive amount per month. Instead, we’re looking for proof of steady, regular income—each week, each fortnight or each month.

Your expenditure

It may seem strange that debt can make you more, and not less, creditworthy. However, a history of loans, credit cards, and similar can serve as evidence of your ability to manage debt and pay things down. It’s a question of balance between your income and your expenditure and making sure your debts are well within your capacity to handle.

Why does it matter if I am creditworthy?

It matters to you

We don’t want our customers to take on debts they can’t afford. Personal loans should never cause you to slide into financial distress.

Our goal is to help our customers when an unexpected cost arises and make their lives easier, not harder. Used responsibly, credit can help you get out of a tricky situation. Naturally, we don’t want our customers to borrow more than they can afford. This is neither beneficial to our customers, nor us.

With that said, we do look at more than just your credit score. Jacaranda Finance also considers Centrelink as income if you’re looking for bad credit Centrelink loans.

It matters to us

We take our role as responsible lenders very seriously for those who apply through Jacaranda Finance. Lending recklessly is not suitable for us or our shareholders. It’s not good for our community and, ultimately, it would let you down, too.

That’s why we place such importance on creditworthiness.

If you’re looking for a short term personal loan and would like to see what your repayments could look like, scroll up and use our handy online calculator. Applying is free, and we could even have an outcome for you in 60 minutes*.

Written by Jacaranda Team