Three C’s of Credit
Character: means how a person has handled past debt obligations: From credit history and personal background, honesty and reliability of the borrower to pay credit debts is determined.
Capacity: means how much debt a borrower can comfortably handle. Income streams are analyzed and any legal obligations looked into, which could interfere in repayment.
Capital: means current available assets of the borrower, such as real estate , savings or investment that could be used to repay debt if income should be unavailable.
Source : The Virtual Library on Microcredit