Do You Know The 6 C's of Credit?

What are the six common things your lenders look for before granting a borrower credit?

1. CHARACTER:

The question of character asks; how a person has lived up to their 'past' responsibility pay his/her debts? Character is measured by the debtors credit and payment history.

2. CAPACITY TO PAY:

Means having the income to pay, and the ability to pay back the credit.

3. CAPITAL (money):

Capital s how much money the borrower owes (debt) minus how much money (income) you earn. Lenders like for you to earn more than you owe.

4. COLLATERAL:

Anything [of value] owned by the borrower is called collateral (like money, a home, or jewelry). Collateral can be taken away (repossessed) if the borrower fails to pay back the debt.

5. CONDITIONS:

Conditions include; the kind of job the borrower has, the borrowers time on the job, how many times the borrower has lived at the same address, how old they are etc.

In my experience with my clients, a borrower can have excellent payment and credit history but other conditions prevent the lender from granting the borrower credit.

6. CONFIDENCE:

A successful borrower gives confidence to the lender by addressing all the lender's concerns. A good credit and payment history, good debt to income balance and stable conditions will help provide a lender with confidence in the borrower.