In the world of financing, credit means the borrowing of certain resources from one party to another. The party which gives the resources is called the lender, while the other one that receives the resources is called the borrower. Since the borrower does not have to pay immediately, it then forms a debt which is then paid off according to the terms and conditions that have been agreed to by both parties.

Basically, both parties must meet halfway for a smooth flow of their financial credit. Sometimes problems occur along the way and so both parties end up seeing each other in serious legal proceedings. The resources which the lender can offer are mostly dependent on the investment that it has made for its company. Also, the credit limit given to a credit card applicant is dependent to the creditworthiness of the borrower.

What Is Creditworthiness?

Creditworthiness generally gives an (more…)