Which 'C' in the 5 C's of Credit reflects the borrower's employment stability and length of current work?

• A. Capacity
• B. Character
• C. Collateral
• D. Credit

Answer: (B)

In the 5 Cs of credit, employment stability and how long someone has been in their current job are indicators of the borrower's reliability and likelihood to meet obligations, which is reflected in Character. A steady, long-term job history suggests the borrower has a consistent income and a track record of responsibility, which lenders view as a sign of trustworthiness and willingness to repay. Capacity, on the other hand, is about the ability to repay based on income level and existing debt, not the personal reliability aspect. Collateral concerns the assets backing the loan, and Credit relates to past borrowing behavior and credit history. So, the aspect of job stability best fits under Character.