Three Cs of Credit

Your credit score is a measure of factors that may affect your ability to repay credit. It's a complex formula that takes into account how you've repaid previous loans, any outstanding debt, and your current salary.

A credit score is dynamic and can change positively or negatively depending upon how much debt you accrue and how you manage your bills. The factors that determine your credit score are called The Three C's of Credit — Character, Capital and Capacity.

Character:

From your credit history, a lender may decide whether you possess the honesty and reliability to repay a debt. Considerations may include:

  • Have you used credit before?
  • Do you pay your bills on time?
  • How long have you lived at your present address?
  • How long have you been at your present job?

Capital:

A lender will want to know if you have valuable assets such as real estate, personal property, investments, or savings with which to repay debt if income is unavailable.

Manage Debt: Manage My Money's debt payoff analysis can help limit the impact of debts and loan payments on your capacity.

Capacity:

This refers to your ability to repay the debt. The lender will look to see if you have been working regularly in an occupation that is likely to provide enough income to support your credit use.

The following questions may help the lender determine this:

  • What is your current salary?
  • How many other loan payments do you have?
  • What are your current living expenses?
  • What are your current debts?
  • How many dependents do you have?
Source: Visa's Practical Money Skills for Life™1, Opens in a new tab
  1. Upon clicking this link, you will leave the First Citizens Bank website and go to a third party site. Third party sites may have a privacy policy different from First Citizens Bank and may provide less security than this site. First Citizens Bank and its affiliates are not responsible for the products, services, and content on any third party website.

This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank [or its affiliates] neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your situation.

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