Let’s examine the last and most important of the 5 C’s of credit – Character.
CHARACTER (INTEGRITY) deserves more scrutiny from lenders, as it focuses on the borrower’s willingness to repay the loan. THUS it deserves the most weight!
Personal credit score and background check
- It’s not hard to understand why investors want to invest with those who possess impeccable references and credentials. This is where the character of the loan applicant comes in to play.
- While the character card can be challenging to assess, a bank will carefully review business and personal credit reports, as well as communicate with vendors regarding a business owner’s dealings with them.
- Owners need to demonstrate that they are indeed effective leaders and can conduct themselves professionally in challenging times.
- Securing a business loan from a bank is based on trust, to a large extent. Banks need to know that a business owner will act in good faith at all times to honor any commitments.