What are the 5C’s of Credit

When you apply for a loan, a credit assessor looks at five key criteria –

1. Character – things like stability of employment, how long you’ve lived somewhere and your credit history.

2. Capital – Your deposit and savings history. The larger the deposit the lower the risk.

3. Capacity – Your type of income or employment, and how easily can you service (i.e. pay back) the loan.

4. Collateral – is there a property or asset the lender can repossess if you can’t pay the loan?

5. Conditions – What sort of loan do you want? A specific purpose, such as a home may be more preferable to a lender than a loan for an unspecified purpose.

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