The 5 C's of credit
When a lender reviews your credit history.
What is Character?
The amount of money immediately available in your bank account.
Personal and community ideals that can assist in discovering your "money culture".
What are Values?
The "20" in the 50-30-20 rule.
What is Savings?
Giving a free gift or a discount creates a sense of obligation in a person's minds to make a purchase.
What is Reciprocity?
When a lender reviews your ability to repay a loan.
What is Capacity?
When more money is drawn from an account than the existing balance.
What is overdrawn?
Items or services purchased that fill either a necessity or desire.
What are Wants vs. Needs?
An account to set aside money with an AYP of up to 5%.
What is a High Yield Savings Account?
Leading you to believe that "everyone is doing it" and that you should be doing it too.
What is Social Consensus?
When a lender considers situations or circumstances that may affect repayment of a loan.
What are Conditions?
A rating that indicates how good a credit risk you are.
What is a Credit Rating?
The way a society organizes to meet the needs of it's people.
What is an Economy?
Telling you that a product will help you and improve your life.
What is Benefit?
When a lender reviews your personal investment or downpayment and alternative repayment resources.
What is Capital?
A fee paid for using money.
What is Interest?
Two basic categories of expenses.
What are Fixed and Flexible Expenses?
Sending a letter of dispute to a credit bureau.
What is Correcting an Error on your Credit Report?
Creating a false sense of urgency by suggesting that something is a short-term offer or is in limited supply.
What is Scarcity?
When a lender reviews your personal resources and valuables to guarantee repayment of a loan.
What is Collateral?
Comparing your checkbook register to your account statement to ensure accuracy.
What is Reconciling?
The system of four steps to developing a spending plan.
What is TATS?
A type of credit that allows you to borrow a specific amount of money at one time for a defined purpose.
What is Installment Credit?
Trying to build a trustworthy reputation by claiming a product is of high quality or that others approve of it.
What is Source Credibility?