creditworthiness
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creditworthiness
The ability and willingness of a person or company to repay debts they have taken on by the agreed deadline. It is checked by banks before a loan is granted.
Eine gute Kreditwürdigkeit ist entscheidend, um einen Hauskredit zu bekommen.
Good creditworthiness is crucial for getting a home loan.
This word consists of three parts: 'Kredit' (credit/loan), the adjective 'würdig' (worthy), and the ending '-keit', which describes a quality. So it literally means the 'worthiness' to receive a loan.
Die Bank hat Zweifel an seiner Kreditwürdigkeit.
The bank has doubts about his creditworthiness.
'Kreditwürdigkeit' (creditworthiness) is often used with certain verbs. A bank 'prüft' (checks) or 'bewertet' (assesses) creditworthiness, while a person can 'nachweisen' (prove), 'besitzen' (possess), or 'verbessern' (improve) it.
Vor der Kreditvergabe wird die Bank Ihre Kreditwürdigkeit prüfen.
Before granting the loan, the bank will check your creditworthiness.
To describe the quality of creditworthiness, the adjectives 'gut' (good) or 'hoch' (high) are usually used for a positive assessment, and 'schlecht' (poor) or 'gering' (low) for a negative assessment.
Mit einer schlechten Kreditwürdigkeit ist es fast unmöglich, einen Kredit zu bekommen.
With poor creditworthiness, it is almost impossible to get a loan.
insolvency
'die Insolvenz' and 'die Kreditwürdigkeit' both belong to the topic of credit and debt. However, they show almost opposite situations. 'Kreditwürdigkeit' means that a person or company is likely to be able to repay debts on time. 'Insolvenz' means that debts can no longer be paid and a legal process begins. Learners may confuse the words because banks talk about both when discussing financial problems. The key point is: creditworthiness is checked before you borrow money; insolvency shows that the ability to pay has already collapsed.
Im Büro prüft die Bank heute die Kreditwürdigkeit des neuen Kunden.
At the office today, the bank is checking the new customer's creditworthiness.
Lukas hörte zu Hause, dass sein früherer Arbeitgeber Insolvenz angemeldet hatte.
At home, Lukas heard that his former employer had filed for insolvency.