Question

Why do you think character is considered to be the most important of the “five Cs”? How might it be assessed?

Answer 1

Character alludes to a borrower's notoriety or record opposite monetary issues. The familiar saying that previous conduct is the best indicator of future conduct is one that moneylenders passionately buy in to. Each has its own recipe or approach for deciding a borrower's character, trustworthiness, and dependability, however this appraisal commonly incorporates both subjective and quantitative strategies.

The more abstract ones incorporate dissecting the account holder's instructive foundation and work history; calling individual or business references; and directing an individual meeting with the borrower. Increasingly target techniques incorporate surveying the candidate's record of loan repayment or score, which credit revealing organizations normalize to a typical scale.

Albeit every one of these components assumes a job in deciding the borrower's character, banks place more weight on the last two. On the off chance that a borrower has not overseen past obligation reimbursement well or has a past liquidation, their character is considered less worthy than a borrower with a spotless financial record.