The Three C's of Credit
refers to how a person has handled past debt obligations: From the credit history and personal background, honesty and reliability of the borrower to pay credit debts is determined.
refers to how much debt a borrower can comfortably handle. Income streams are analyzed and any legal obligations looked into, which could interfere in
refers to current available assets of the borrower, such as real estate, savings or investment that could be used to repay debt if income should be unavailable.
CAMEL is a tool sometimes used for assessing credit-worthiness of a borrower.
CAMEL refers to:
- C: Capital
- A: Assets
- M: Management
- E: Equity
- L: Liquidity
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