Credit Reports

Credit Reports

The 3 C's of credit: character, capital, and capacity

The 3 C's of credit refer to character, capital, and capacity. These are areas the creditor generally looks at prior to making a decision.


From your credit history, the lender attempts to determine if you possess the honesty and reliability to repay the debt. They might ask the following questions in their evaluation:

  • Have you used credit before?
  • Do you pay your bills on time?
  • Do you have a good credit report?
  • Can you provide character references?
  • How long have you lived at your present address?
  • How long have you been at your present job?


The lender may want to know if you have any valuable assets such as real estate, personal property like an automobile, savings, or investments that could be used to repay credit debts if income is unavailable. They might ask these questions with regard to capital:

  • What property do you own that can secure the loan?
  • Do you have a savings account?
  • Do you have investments to use as collateral?


Capacity refers to your ability to repay the debt. The lender may 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 might help the lender determine this:

  • Do you have a steady job? If so, what is your 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?

Credit Reports

Consumers have the right to request a free credit report from each of the three major credit agencies every year. In compliance with the Fair Credit Reporting Act (FCRA), Equifax, Experian and TransUnion have set up a central website and a toll-free telephone number through which you can order your free annual report. To order, visit or call 1-877-322-8228.

To learn more about credit scores and the major impact your score has on your personal finances, visit Visa's free 'What's My Score' educational web site at or Fair Isaac's web site at


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