How do you calculate your creditworthiness?


Creditworthiness refers to the maximum amount of credit that the bank can give us. In addition to our income, it is influenced by, among others form of employment, credit history, and other liabilities

Creditworthiness – definition

Creditworthiness - definition

Creditworthiness is a bank’s assessment of the financial credibility of a customer who is applying for a loan. Bank employees analyze whether the potential borrower will be able to pay the installments regularly. The higher the creditworthiness, the higher the loan (and on better terms) can be granted by the bank.

Creditworthiness is related to our earnings and expenses, it is the amount that after deducting the cost of living and other obligations we will be able to freely dispose of. Banks calculate the amount of free customer funds. In the case of credit, their amount must be sufficient to cover the monthly installment.

The necessity of the bank’s assessment of creditworthiness on the basis of documents provided by the applicant results from the Banking Law. However, the regulation does not specify how to calculate creditworthiness. How a particular bank approaches this issue depends on its internal financial policy.

What can the bank ask about?

What can the bank ask about?

Anyone with full legal capacity has the right to check their creditworthiness. We can do this by sending an inquiry to BIK, ie the Credit Information Bureau. However, it should be remembered that each report generated from BIK is an additional cost. In addition, each inquiry reduces our credit standing, so do not overdo it with their quantity.

When examining creditworthiness, the Bank will ask about:

  • the amount of income received,
  • owned assets,
  • own contribution,
  • loan currency (if we apply for a loan in a foreign currency, we must have a much higher creditworthiness than when we apply for a loan in dollars),
  • loan period (the longer it is, the better chance we have to get a loan),
  • form of employment (an employment contract concluded for an indefinite period is best assessed),
  • Duration of the agreement,
  • other financial liabilities,
  • monthly living costs (eg rent, bills, utilities, fuel, food etc.),
  • the number of persons in the household of the borrower.

Estimating our creditworthiness, the bank will deduct all charges from the amount of income it receives.

How to check your credit standing?

credit standing?

If you want to check your credit standing, we can use the calculators available on the web. However, we should remember that each loan application is considered individually. A creditworthiness calculator is a helpful tool, but it does not replace the analysis of creditworthiness by financial institutions. Therefore, the information received as a result of using the calculator cannot be treated as the real value of our creditworthiness.

When assessing creditworthiness, banks also examine the client’s payment discipline, ie whether he repaid earlier loans and credits in a timely manner. Both liabilities incurred in banks and in private loan companies are taken into account.

The human factor, ie the borrower’s age, gender, marital status and place of residence is also important. Equally important are education, continuity of employment and residence, and professional profile.

Each bank uses its own algorithm to calculate creditworthiness. In practice, this means that our creditworthiness may be different in different banks. Therefore, the easiest way to check your creditworthiness is to contact the bank where you would like to take a loan.

Creditworthiness also depends on which loan and with what installments we plan to apply. It is assessed separately for each type of loan. For example, it may turn out that we can only afford a given loan if we decide on equal installments.

If we apply for a mortgage, the form of security will also be important, in addition to the factors already mentioned. We mean a property that we already own or are planning to buy. Of course, the more it is worth, the more reliable customers we are to the bank.

In some banks (it all depends on the policy of the financial institution), credit can also be granted to persons working under a mandate contract or a specific task contract. They are accepted by the bank, provided that we receive income from them for at least a year. Such a contract must be concluded for a period of at least 3 months on the day of submitting the application.

How to improve your credit standing?

How to improve your credit standing?

There are several ways to increase creditworthiness: we can apply for a loan with a spouse or other close person, pay off our obligations and negotiate existing employment conditions and the amount of remuneration.

Another way to increase creditworthiness is to spread the liability over a longer period (this will translate into lower monthly installments, and thus – higher creditworthiness). If we have other debts on our account, we can apply for their consolidation or for extension of the repayment date. Our credit standing will also increase if we give up credit cards and a revolving limit on the account.

If you are planning to apply for a loan, do not agree to be someone else’s resident. A loan or credit guarantee also reduces your credit standing. The loan that we have guaranteed to someone affects our ability just like a loan that we would take on our own.

We should remember that when analyzing our creditworthiness, the bank will take into account not only the amount of fixed income but also bonuses and bonuses. If we receive such information, do not forget to indicate it in the income statement. In addition, apart from the documents that we will provide (their list we will receive from the bank), the financial institution will also verify us in the debtors’ databases. That is why building a good credit history is so important. Information that earlier and regularly repaid our loans will increase our chances of receiving another commitment.


credit loans

Creditworthiness depends on many factors. It is influenced by our income, form of employment, living costs, current and past indebtedness, etc. To improve credit standing, we can apply for a loan with another family member, give up a credit card and build a positive credit history.

Creditworthiness is not a fixed value and each bank uses its own calculation methods. The estimation of creditworthiness consists in deducting our liabilities from the amount of income. The bank must be sure that we can afford to pay the loan on time.