An institutions evaluation of whether a person is suitable to receive credit is called:
A. Credit rating
B. The three C's (character, collateral, and capacity)
I think it is A...?
Right.
Thank you...one more please
Go ahead.
One of the disadvantages of using electronic money is it is possible to lose track of one's budget.
A. false
B. true
I honestly thought that it was B - but really it should help you keep track....what do you think?
See above.
You are correct! The correct answer is A. Credit rating.
A credit rating refers to an institution's evaluation of an individual's creditworthiness, which is the likelihood that they will repay a borrowed amount. This evaluation is based on various factors such as the individual's credit history, income, debt-to-income ratio, and other financial information.
To determine an individual's credit rating, institutions typically gather information about their financial background, such as their payment history, outstanding debt, and length of credit history. This information is then used to assign a credit rating, which can range from poor to excellent.
The credit rating plays a significant role in whether an individual is deemed suitable to receive credit, as it helps lenders assess the level of risk involved in lending money to that individual. A higher credit rating increases the chances of receiving credit at favorable terms, such as lower interest rates and higher borrowing limits.
On the other hand, the three C's (character, collateral, and capacity) are factors that lenders often consider when evaluating a borrower's creditworthiness. These factors are used to assess the individual's ability and willingness to repay the loan. While they are not the precise term for an institution's evaluation of credit suitability, the three C's can be seen as components that contribute to the overall credit rating assigned by the institution.