The Five C's

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Axia College Material
Appendix E

The Five C’s Worksheet

Directions: Identify the following factor descriptions to their corresponding C of credit. The five C’s are listed below:

• Capacity
• Capital
• Collateral
• Character
• Conditions

|Condition |Which C? | |Your household cash flow helps to determine this C: |Your household cash flow helps to determine your capacity. | |Under these __________, you may still be approved with a cosigner |Under these conditions, you may still be approved for credit with a | | |cosigner. | |This demonstrates how much your assets are worth. |Capital is when a lender is interested in your household’s net worth. | | |If your assets are greater than your debt, lender’s consider | | |liquidating other assets, if necessary to repay the loan. | |Using your car or house as a promise to pay |Using your car or house as a promise to repay your loan is called | | |collateral. | |This makes you a better credit risk to the lender |Collateral ( house or car) will also make you a better credit risk to| | |lender’s. The more valuable the collateral, the better the lender | | |likes it....
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