In the 5 Cs of Credit:How long you have lived at your current address, how long youve been in your current job, and whether you have a good record of paying your bills on time and in full.

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

In the 5 C’s of Credit:How long you have lived at your current address, how long you’ve been in your current job, and whether you have a good record of paying your bills on time and in full.

A	Character
B	Capacity
C	Capital
D	Collateral
E	Conditions

Explanation:

Detailed explanation-1: -The lender will typically follow what is called the Five Cs of Credit: Character, Capacity, Capital, Collateral and Conditions. Examining each of these things helps the lender determine the level of risk associated with providing the borrower with the requested funds.

Detailed explanation-2: -Capacity Capacity measures the borrower’s ability to repay a loan by comparing income against recurring debts and assessing the borrower’s debt-to-income (DTI) ratio. Lenders calculate DTI by adding a borrower’s total monthly debt payments and dividing that by the borrower’s gross monthly income.

Detailed explanation-3: -This system is called the 5 Cs of credit-Character, Capacity, Capital, Conditions, and Collateral.

Detailed explanation-4: -1. Character. A lender will look at a mortgage applicant’s overall trustworthiness, personality and credibility to determine the borrower’s character. The purpose of this is to determine whether the applicant is responsible and likely to make on-time payments on loans and other debts.

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