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Your "character" is what a creditor looks at when debating whether to give you a line of credit. A few of the things that go into consideration are whether you have used credit before, your ability to pay bills in a timely manner and the stability of both your job and your residency. Someone who moves around frequently is less likely to be granted a line of credit than someone with a stable home.


Creditors look at your "capital" to see what valuable assets you have in your possession. These assets can be as relatively insignificant, such as a computer or items of furniture, or more financially meaningful possessions like real estate property or bank savings. Lenders look at these assets to see what can potentially be taken in the event that you cannot pay your debt--some even call this "C" "Collateral," not "Capital." Collecting assets is the last resort for creditors, and used only with people who do not have a source of income. Those who do have a steady income see their wages garnished until the debt is repaid.


The third C, "capacity," refers to your ability to repay any debts you incur. Like your "character," "capacity" takes into account your ability to repay your debts in a timely manner as well as to gauge your ability to pay the debts. Creditors look at your current salary, your

living expenses, your current debts and any dependents you have. If you have other loan payments going on at the same time, your chances of being approved will increase or decrease significantly based on how well you've been keeping up with the payment.



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