Question

If you were in a position to underwrite debt, which of the following "C's" above do you think are the most important and in what order? Explain.  

Answer 1

Being the under-write debt position, we have to grade the credit score of each and every credit of instrument. The credit score is always be dynamic and changes positively or negatively which will depend on three C’s of credit , which are Character, Capital and Capacity. While putting score on the credit, we will prefer more on "Character factor" which the lender attempt always honesty, on second position, we take up "Capital factor" like assets to protect the debt and finally, the "Capacity factor" is considered where the ability to repay the debt is calculated.