Factors That Affect Credit Worthiness


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Gertie and Nate are planning to open a small landscaping company. They intend to use the equity in their home to secure a business loan from the bank. Their home is an example of:

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1. Yvette, a loan officer, examines Omar's tax returns, current employment, debts, and assets to determine his financial ability to pay back a bank loan. Yvette subsequently recommends Omar's loan be approved because he has the _____ to make the loan payments.

2. Which of the following scenarios illustrates a situation in which a lender quantifies a borrower's character to determine creditworthiness?

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About this Quiz & Worksheet

By using this printable, interactive quiz and worksheet combo, you can refresh your grasp on the requirements that come into play in determining whether or not a person's application for credit is likely to be granted.

Quiz & Worksheet Goals

In these assessments, you'll be asked to supply the single terms that match the following definitions:

  • Financial ability of a borrower to pay back a loan
  • Physical product used to secure a loan
  • Amount of cash contributed by the borrower toward the total price of the product
  • Special factors surrounding and specific to the loan
  • Term used to describe the trait of a borrower that a credit report is supposed to determine

Skills Practiced

This quiz and worksheet will let you practice the following skills:

  • Reading comprehension - ensure that you draw the most important information from the related lesson on credit worthiness
  • Making connections - use understanding of the concept of credit worthiness
  • Interpreting information - verify that you can read information about the factors affecting credit worthiness and interpret it correctly
  • Knowledge application - use your knowledge to answer questions about credit worthiness

Additional Learning

To learn more about credit worthiness, read through the accompanying lesson entitled Factors that Affect Credit Worthiness. The lesson focuses on the following objectives:

  • Comment on the effect of properly used credit on the economy
  • Enumerate the 5 Cs of credit worthiness
  • Differentiate and talk about the two types of conditions that can affect credit worthiness
  • Discuss how the rating method used by banks to determine credit worthiness can be put to use on a personal basis