To Lend, or Not to Lend

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: