To Lend, or Not to Lend

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We all have that friend who asks to borrow our things yet never returns them on time or worse, never returns them at all! In my experiences as a lender I have picked up the trends of bad borrowing and in the process, have learned to efficiently borrow myself. In my mind, there are three golden traits to a good borrower:

  1. The borrower only borrows when needed.
  2. The borrower does not borrow more than they should.
  3. The borrower returns what they borrowed in a timely fashion. 

Essentially, these three traits all break down to trust, and not following them can decrease a borrower’s trustworthiness. For instance, I once lent my favorite dress to my cousin which was intended to be used for a wedding. She promised to return it once the wedding had passed and indeed she did – a year later – when she had already worn my favorite dress to more than just that wedding. I’ll admit I struggled to get my dress back, and when I finally did I was displeased by its worn condition. As you can speculate, my cousin did not follow the three golden rules to good borrowing, and it is very unlikely that I will ever let her borrow from me again. How was I to know that she was not a person worth lending to? 

Unfortunately there is no number hovering over a person that will let us know whether they are a worthy borrower. It is something that we must determine on our own through experiences similar to the one with my cousin. 

In a larger scale and out in the world of finance, credit works similarly. Credit is defined as goods, services, or money being received in exchange of the promise to pay back a definite sum of money in the future.

To lend or not to lend is a question that is frequently asked by credit lenders. Fortunately for them, they are able to evaluate a lender based on their credit score and not merely on assumptions. Possessing the three golden traits will keep you on the road to good credit and will make you a trustworthy borrower. 

To learn more about credit read: CREDIT! CREDIT! EVERYWHERE I GO “CREDIT!” 
To learn the basics of credit reports and scores watch: The Basics of Credit Reports and Credit Scores Video

Student Editor: