Question 3 of 9 How do lenders evaluate if a borrower or cosigner will pay them back? Capacity, collateral , character Callousness, capacity,, character Capacity, criticism character Cadence, collateral calendar

## Step 1<br />Lenders evaluate if a borrower or cosigner will pay them back based on three main factors: Capacity, Collateral, and Character. These factors are collectively known as the "3 Cs" of credit.<br /><br />## Step 2<br />### **Capacity**<br />This refers to the borrower's ability to repay the loan. Lenders assess this by looking at the borrower's income, employment history, and current level of debt.<br /><br />## Step 3<br />### **Collateral**<br />This is an asset that the borrower offers as a guarantee for the loan. If the borrower defaults on the loan, the lender can seize the collateral.<br /><br />## Step 4<br />### **Character**<br />This refers to the borrower's reputation and trustworthiness. Lenders assess this by looking at the borrower's credit history and references.<br /><br />## Step 5<br />The options "Callousness, capacity, character" and "Cadence, collateral calendar" are not relevant to the context of lending and credit evaluation.<br /><br />## Step 6<br />The option "Capacity, criticism character" is incorrect because "criticism" is not a factor in lending decisions.