The economic crisis of recent years has forced several companies and families to resort to loans and at the same time made it more difficult to access credit. In fact, the creditor must be able to dispose of tools that protect him from the possible risk of failure to return the amount transferred. One instrument that spread rapidly in this area is that of creditworthiness, which arose following the Credit Reform.
Apply for a loan
A person who has found himself in the need to apply for a loan must demonstrate that he can return the sum received at the set deadlines.
This ability, defined as creditworthiness, is subject to evaluation by the lender. In some forms of funding, awarding low credit means seeing the cost of funding increase; the latter, in fact, is “charged” with an additional amount, linked to the risk of insolvency that the bank has to bear. On other occasions, low creditworthiness leads directly to a failure to grant credit.
The methods normally used to calculate the merit provide for the examination of numerous aspects of the applicant’s economic and financial life. There is no single rule to determine it even if, in most cases, the basic criteria taken into consideration are more or less the same. Among others, it includes income flows (and relative solidity) in the loan period, the level of debt, any delays in returning from previous loans, insolvencies and the availability of resources (both financial and equity). In practice, the goal of the lender is to get to know the client’s moral abilities, his income situation and financial needs more closely. At the end of the analysis, the credit institution assigns to each debtor a code expressed in letters. When the risk is extremely high, the rating is indicated with the letter “C”. On the contrary, if the subject proves solid, the assigned rating is “AAA”.
|AAA||Maximum credit reliability||Very low risk|
|AA||Very high credit reliability||Low risk|
|TO||High creditworthiness||Low risk|
|BBB||Good creditworthiness||Medium risk|
|BB||High indebtedness||Medium risk|
|B||Temporary liquidity difficulties||High risk|
|CCC, CC, C||Financial difficulty||Very high risk|
The difference lies in the presence
If you are faced with an unexpected expense, or some work problems make financing indispensable, we at the Reliance Group make our professionalism available to respond to your needs with targeted advice.