Five Cs of Credit

Glossary

Banking

Five Cs of Credit

The 5 Cs of Credit refer to Character, Capacity, Collateral, Capital, and Conditions. Financial institutions apply these to assess whether individuals pass muster as borrowers and if so, on what credit terms (i.e interest rate, credit limit). The end-result of this analysis, the credit report, is a detailed summary of a borrower’s outstanding debt, debt capacity, debt management abilities, payment history, current income, savings, assets, employment history and prospects.

logo-animationlogo-animationlogo-animation

Related terms