Creditworthiness — What it is and how to calculate it

Definition

Creditworthiness is an assessment made by a bank determining the maximum loan amount you can repay while maintaining financial security. It's not a fixed value — it changes based on your income, expenses, existing obligations, and macroeconomic parameters.

What affects creditworthiness

Positive factors

• High net income — The more you earn, the higher the creditworthiness
• Permanent employment contract — Banks treat it as the most stable
• No other obligations — No installments, credit cards, limits
• Down payment > 20% — Reduces risk for the bank
• Positive BIK history — Timely payments on previous obligations
• Long employment tenure — Employment stability

Negative factors

• Credit cards — Even an unused limit reduces creditworthiness
• Consumer installments — Leasing, phone installments, loans
• Contract work/B2B — Banks apply a correction factor (60-80% of income)
• Short employment tenure — Less than 6-12 months with current employer
• Many dependents
• Negative BIK entries

How banks calculate creditworthiness

Simplified formula:

Creditworthiness = (Net income − Living costs − Obligation installments) × Factor × Loan period

Banks use their own scoring models, but key elements are:

1. Net income (after taxes and ZUS)
2. Living costs (banks have minimum rates, e.g., 1,500 PLN/person)
3. Existing installments and credit card limits
4. Safety buffer — Bank assumes interest rate increase by 2-5 percentage points

How to increase creditworthiness

1. Close credit cards — Even an unused limit is an obligation
2. Pay off small installments — Phone installments, consumer loans
3. Increase income — Raise, bonus, additional income source
4. Extend loan period — 30 years instead of 25 (lower installment = higher creditworthiness)
5. Take a joint loan — Two incomes = higher creditworthiness
6. Switch to employment contract — If possible, 6+ months before application

Creditworthiness vs. actual possibilities

Important: Creditworthiness is the maximum amount the bank will lend you — not the amount you should borrow. Loan installment shouldn't exceed 25-30% of net income. The bank will lend you more, but you should borrow less.

How Freenance can help

Freenance gives you a real picture of your finances before visiting the bank:

• Accurate income and expenses — Not estimates, but hard data
• List of obligations — All installments and limits in one place
• Installment simulation vs budget — Whether you can afford the loan stress-free
• Runway — How many months you'd survive if you lost income

👉 Know your financial situation with Freenance — freenance.io