Becoming Creditworthy

An Ode to Creditworthiness

It’s a challenging time

Your finances may flail

Improve your creditworthiness

Don’t let the pandemic prevail.

Free weekly credit reports

Can keep you on track

Take positive steps forward

And don’t look back.

Capacity, character and collateral

Are key factors to consider

Lenders hedge against risk

Ensure your finances glitter.

Now is a good time to utilize free weekly credit reports offered by Equifax, Experian, and TransUnion to ensure you’re keenly aware of the current state of your financial situation. Be proactive in monitoring your financial health and take steps when you can to improve your creditworthiness. Character, capacity and collateral — the three “C’s” of credit — are established key elements used to determine creditworthiness. According to TransUnion:

•       Character is defined by credit and loan repayment history 
•       Capacity measures income and ability to service a loan or line of credit 
•       Collateral refers to asset(s) that could be leveraged for payment 

If you are able to improve your financial health and stabilize your financial situation, you’ll have greater flexibility and options when it comes to financial decisions.

But during times of heightened financial stress, it’s even more difficult to focus on the most effective, appropriate actions. Financial wellness resources help guide individuals down the path to financial stability, providing education and recommendations that are most relevant to their unique circumstances. 

The first step is being able to appropriately assess your financial situation. What does financial wellness look like for you? Identify current trends and opportunities, and determine your financial goals that will ultimately help you improve your personal financial health. A holistic financial wellness program will be able to provide you with recommendations and resources that will position you to make more informed decisions around spending, saving, borrowing and planning.

Spending, saving, borrowing and planning are the four pillars of financial wellness.  These categories help you assess the current state of your financial health and overall well-being. The Consumer Financial Protection Bureau (CFPB) studied consumers across the country and concluded these four elements were universally acceptable as financial wellness:

• Having control over day-to-day, month-to-month finances
• Having the capacity to absorb a financial shock
• Being on track to meet financial goals
• Having the financial freedom to make the choices that allow them to enjoy life

Today, about 83% of employers offer a financial wellness program. If you aren’t sure if your company offers this benefit, check with your HR department to start your journey toward greater financial well-being. You’re not in this alone. There are people, like your employer, and resources available to help you regain and maintain stability. Minimally, take advantage of this opportunity to receive weekly credit reports to create awareness around your current financial situation, the first step toward improvement.