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Understanding the 5 C’s of Credit

Whether you're applying for a loan, a mortgage, or a line of credit, lenders need a way to understand your financial story — and that’s where the 5 C’s of Credit come in.
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PE
Prosperity Expert
Prosperity Team

At Prosperity Credit Union, we look at more than just numbers. We look at the whole picture. The 5 C’s help us do just that.

  1. Character
    This is about trust. We look at your credit history, payment habits, and reputation for following through on financial commitments.
  2. Capacity.
    Can you comfortably repay the loan? We consider your income, employment, and existing debts to understand your ability to make payments.
  3. Capital.
    What do you have invested? The money or assets you put toward a purchase (like a down payment) show your level of commitment and help reduce risk.
  4. Collateral.
    In some cases, we’ll look at what you can offer as security (like a vehicle or equipment) in case the loan can’t be repaid as planned.
  5. Conditions.
    We also consider external factors — like the current economy, interest rates, and how you plan to use the loan — to help shape our decision.

We use the 5 C’s as a guide — but at Prosperity, you’re never just a number. We take the time to understand your unique situation, goals, and challenges. That’s the credit union difference.

Have questions about credit? We’re always happy to chat — in-branch, over the phone, or by appointment.