Definition

Five Cs of Credit

What are the five Cs of credit?

The five Cs of credit are the criteria based on which the lenders gauge the borrower's creditworthiness. The five Cs stand for character, capacity, capital, collateral and conditions.

Highlights

  • The five Cs of credit are the measures employed by lenders to assess the borrower before advancing a loan.
  • The five Cs are character, capacity, capital, collateral and conditions.
  • Using the five Cs is for the lender to assess the risk of default associated with the borrower.

Frequently Asked Questions (FAQs)

How can the five Cs of credit be explained?

  • The five Cs of credit are explained as follows

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