What is the credibility?
CormWorityness has to do with the debtor's ability to pay the current debt in time. In the context of ability, several basic factors come into play. The debtor's credibility assessment involves identifying the presence of resources that can be used to repay debts, the debtor's willingness to use these resources to repay the debt and the history of the decision to repay the debt obligations in time.
When the creditors decide to expand the loan to an individual or business, this loan extension is based on the understanding that the debtor will have resources that can be used to repay the debt. Sources are usually considered in terms of some type of cash flow. Cash flow can be from income obtained from employment or income that are accepted in exchange for goods and services provided to clients. Even a cash flow, which results from regularly planned payouts for credibility or interest income, can be considered an verifiable type of cash flow.
Once the debtor has a flow or source that can be used for debt in honor, it is necessary to find out whether there is a willingness to monitor and actually make payments. This is where the previous credit history of an individual or business is important. When the debtor has in the history of paying outstanding debt in conditions, it is a strong sign of past credibility. The use of past history as an indicator can reasonably assume that the debtor will prove a similar formula in the future.
creditors will also look at the current amount of indebtedness that the individual carries. By comparing the ratio between current debt and income, it is possible to determine whether the debtor can reasonably manage another obligation without significantly increasing the risk of failure. This element of the UATA evaluation is in the best interest of the debtor, as it helps to prevent a duty that could have a negative impact on overall credibility.
Correct control of available resources goes DLOThe way to establish and maintain a fight. By maintaining debts in accordance with available income and timely repayment of debts, it will be healthy and attractive to potential creditors.