5 C's of Credit

A bad credit rating, or no rating at all, is a serious barrier to financial independence. The fees, deposits, and high interest charges demanded of people with low or no credit take a debilitating bite out of monthly cash flow and can make it virtually impossible to increase net income and build assets.

Character : an individual’s track record of managing credit and making payments indicates their “character” as relevant to the lender

Capacity : A borrower’s capacity to repay the loan is a necessary factor for determining the risk exposure for the lender

Collateral : When being assessed for a secured product such as a car loan or a home loan, borrowers are required to pledge certain assets under their name as collateral. They may include fixed assets such as the title of a parcel of land or financial assets and securities such as bonds.

Capital : Capital represents the overall pool of assets under the name of the borrower

Conditions : Conditions refer to the specifics of any credit transaction, such as the principal amount or interest rate