The Five C's of Credit

18Oct2008

"The 5 C's of Credit"

  1. Character (willingness to pay)
  2. Capacity (cash flow)
  3. Capital (wealth or net worth)
  4. Collateral (security for the loan)
  5. Conditions (economic conditions)

Credit scoring is based on the information in the borrower's credit report:

  1. Payment History
  2. Amount Owed
  3. Length of credit history
  4. Extent of new debt
  5. Type of credit in use