Character
Character is a term used to describe the financial strength of an individual or business. It is used to assess the creditworthiness of a borrower and is based on a variety of factors, such as the borrower’s past payment history, current income, and other financial obligations. A good character is essential for obtaining credit, as lenders want to be sure that the borrower will be able to repay the loan.
History of the Term
The concept of character has been around for centuries, but it was not until the 19th century that it began to be used in the context of financial lending. In the early days of banking, lenders would often rely on personal relationships and reputation to assess the creditworthiness of a borrower. As banking became more formalized, lenders began to use more objective criteria to assess the character of a borrower. This included looking at the borrower’s past payment history, current income, and other financial obligations.
Comparison Table
| Character | Credit Score |
|---|---|
| Assesses the creditworthiness of a borrower | Assesses the creditworthiness of a borrower |
| Based on a variety of factors | Based on a numerical score |
| Used to assess the ability to repay a loan | Used to assess the ability to repay a loan |
Summary
Character is an important factor in assessing the creditworthiness of a borrower. It is based on a variety of factors, such as the borrower’s past payment history, current income, and other financial obligations. A good character is essential for obtaining credit, as lenders want to be sure that the borrower will be able to repay the loan. For more information about character, you can visit websites such as Experian, Equifax, and TransUnion.
See Also
- Credit Score
- Credit Report
- Debt-to-Income Ratio
- Income Verification
- Collateral
- Credit History
- Credit Utilization
- Payment History
- Credit Limit
- Credit Card Debt
