• stephanieshiu

The Five C's of Credit

Lenders want to hear your story! It is my job to help you determine your five C's and present this information to the lender in a way that can increase your chances of being approved.


Capacity: The ability of borrowers to repay loans, is the most critical of the five Cs. It can be assessed by evaluating the debt service ratios and payment histories on existing credit relationships.

Capital: The amount of money borrowers have invested in the property. Lenders want to see that borrowers are committing their own capital and will check the capitals’ sources.

Character: The general impression of how trustworthy borrowers are to repay the loans. Assessing length of employment, propensity to save, and responsible credit utilization all help to establish character.

Collateral: The guarantee in the form of additional security that can be provided to the lender. For mortgages, collateral is the property itself.

Credit: The borrower’s credit history, in particular the repayment history, and any indication of late or default payments?

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