Theme 5 Lesson 16:
Establishing Credit

Lenders are in business to grant loans to individuals and businesses. However, the applicant's ability to repay a loan can mean the difference between profit and loss for the lender. To reduce risk, the lender assesses the applicant's creditworthiness by reviewing his or her character, capacity for repayment and collateral. They also pay particular interest to the applicant's credit score. In this lesson, the students work through exercises to assess the three "Cs" of several loan applications. They discover how they can establish a credit record, and they learn about the rights and responsibilities they have as borrowers.

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  • Capacity
  • Character
  • Collateral
  • Credit
  • Credit History

Standards in Economics and Personal Finance

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