Credit Crisis One: The Prequel To The Credit Crunch | 6 C's Of Credit

Let's go back to the 1960's. After World War II and the Korean Wars had ended, the Veterans who came home (alive:) were hero's. They came home to quality jobs in many industries. For a flash-back at that era, click the video.

These jobs helped the American economy become the largest in the world. Large companies like; Ford, General Electric, Good-Year, and RCA were only a handful of the golden business that gave millions of Veterans great paying Jobs - with benefits and financial security.

Back in those days, since there were good jobs, there were also expectations - but no exceptions, for a borrower to obtain credit.

In the 1960's Credit was only granted to people based on the 6 Cs of Credit:

1. CHARACTER: A.k.a. ones 'Good Name'.
   
   
2. CAPACITY TO PAY: Means having the income to pay the loan back with interest.
   
   
3. CAPITAL: How much money the borrower has.
   
   
4. COLLATERAL:Does the borrower have anything of value? (like money, a home, or jewelry). Collateral can be taken away or (repossessed) if the borrower fails to pay back the debt.
   
   
5. CONDITIONS:Conditions include; the kind of job the consumer has, time on that job, how many years at the same address, how old they are etc.
   
   
6. CONFIDENCE:A successful borrowers Credit Report gives confidence or concern to the lender. Many consumers have Inaccurate and false information on their Credit Reports hurting their Credit Score.

In the 1790's The 6 C's of Credit became irrelevant.

Check back here for our next episode: Credit Crisis Two: "The Rise Of Usury Rates".
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