Which factor is NOT one of the 5 C's of borrower credit?

The 5 C's of borrower credit are key components that lenders evaluate when assessing a loan applicant's creditworthiness. These factors help lenders understand the likelihood of repayment. The correct answer, “Compromise,” is not part of these 5 C's, which include Character, Collateral, Capacity, Capital, and Conditions.

Character refers to the borrower's credit history and reputation for repaying debts. Lenders look at the borrower's past behavior regarding credit to gauge their reliability.

Collateral involves the assets that a borrower can offer to back the loan. If the borrower defaults, the lender can claim these assets, which reduces risk.

Capacity assesses the borrower’s ability to repay the loan based on their income and existing debt load. It details the borrower's financial situation and ensures that they can handle additional debt.

Capital signifies the borrower's own financial investment in the project, such as down payment money and savings, indicating their commitment to the investment.

Conditions refer to the terms of the loan and the overall economic environment, including interest rates and potential changes in the borrower's situation.

Since “Compromise” is not included in these five critical components, it is considered the correct choice for the question. Understanding the 5 C's helps clarify what lenders consider essential