Which C in the 3 C's of Credit assesses your ability to repay?

The correct choice, Capacity, is essential in assessing an individual's ability to repay a loan. Capacity refers to the borrower's financial ability to make monthly payments, based on their income and existing debt obligations. Lenders analyze the borrower's income, employment stability, debt-to-income ratio, and other financial commitments to determine if they can handle the additional financial burden of a loan.

This aspect of credit evaluation is crucial because it provides insight into whether the borrower is likely to fulfill their repayment obligations in a timely manner, ultimately helping lenders minimize the risk of default. By focusing on the capacity to repay, financial institutions make informed lending decisions that are based on the individual's current financial situation.