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What Makes Up Your Credit Score?

The Four C’s of Credit

When determining Creditworthiness, Banks and Credit Unions take into account Credit Reports and Credit Scores. However an integral part of the process is the determination of the Four C’s of Credit.  The Four C’s of Credit will greatly impact an individual’s ability to obtain auto loans, credit cards and mortgages.


Indicates how much debt an individual can realistically repay based on income and expenses.  Elements used to calculate capacity include living expenses, current debts, income sources, income reliability, ongoing responsibilities (child support, alimony) and proposed payments for a new debt.


Based on objective measures of past behavior that’s likely to impact an individual’s financial actions. These measures include length of residency, length of employment, the nature of the individual’s credit history, and the frequency with which credit information about the individual has been sought.


An item that can be taken and sold by the lender if the borrower fails to pay as agreed. Lenders stake their claim through a lien that gives them a legal interest in the item used to back or “secure” the loan. Examples include a house or vehicle.

Credit History

Determined by existing credit relationships. Factors may include collection activity, credit card accounts, judgments, secured & unsecured loans and mortgages.

Knowledge of the Four C’s of Credit will aid you in understanding the loan process.

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