How can I calculate my net worth and how will this affect my ability to take loans and generally improve my credit standing?
Calculating your net worth will usually not be exact, but rather an estimate. How it works it that you subtract the value of your liabilities from the value of your assets, and the resulting number is your net worth… Assets include cash, money in bank accounts and investment accounts, your car, your home, and personal property. Liabilities would be any outstanding debts you have such as mortgages, auto loans, and credit card balances.
Your net worth does not affect your credit score/standing, but it may help you acquire loans if you have a higher income, which can lead to lower interest rates as well.
To calculate your net worth, simply subtract the total liabilities from the total assets. For this exercise, it doesn’t matter how big or how small the number. It doesn’t necessarily matter if the number is negative. Your net worth is just a starting point to have something to compare against in the future. Assets can be cash, car, house, etc. Whereas liabilities can be outstanding debts you have which includes mortgages, auto loan, student loans, credit card balances.