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The Five C's of Credit

By Kaylie McGurer

What are the five C's of Credit?

What are the five C's of Credit?

  • Character
  • Capacity
  • Capital
  • Collater...
  • Character
  • Capacity
  • Capital
  • Collateral
  • Conditions

Determining a loan

Lenders assess your credit card based on history income and overall financial history

Determining a loan

  • Making sure you have a history of paying back what you owe on time

  • If you have a job you have a form of income

  • Is what you bring in more than what you owe people?

Making sure you have a history of paying back what you owe ...

Creditworthiness

  • Creditworthiness is paying bills on time
  • Someone that shows consistant history of responsible spending
  • Person who shows income that offsets their debt

Creditworthiness

How it connects

How it connects

Capital is your income

Collateral is if you dont pay something off, do you own anything

Capacity ability to repay

Conditions how the borrower intends to use the money

Character is your credit history

Cosigner

  • A cosigner is someone who helps you pay your lo...
  • A cosigner is someone who helps you pay your loan
  • If you can not by yourself

Example of Cosigner

Example of Cosigner

Cosigner could be

  • A parent
  • an aunt or uncle
  • A very clo...

Cosigner could be

  • A parent
  • an aunt or uncle
  • A very close friend

Why would college students need cosigners?

  • They are just starting off
  • Don't have history of credit
  • In college you may or may not have a steady form of income therefore you need someone who does

Treating your cosigner

Treating your cosigner

  • With respect
  • Understanding it is there actual credit
  • Being responsible when you use it and being able to pay it back
  • You dont want the cosigner to be responsible for the debt

Why the 5 c's are important for consumer

If you dont have credit it makes it harder to be a consumer

Why the 5 c's are important for consumer

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