Are you worthy of receiving credit?

This question is answered by the credit card company through an evaluation of you and your current status. The 3 Cs of credit—capacity, credit and collateral will help issuers of credit cards determine your worthiness.

Capacity refers to the ability to pay monthly. This is based on your income and your existing debt. Collateral refers to your assets — assets that can secure payment such as home ownership, car ownership, and bank accounts. Character refers to other factors such as your history with payment of other cards and the length of your employment. The criteria used to determine if someone is worthy of receiving credit will vary between issuers and for their different offers.

You can determine if you are creditworthy on your own by getting a copy of your credit report. There are a few separate bureaus from which you can obtain this info. Each will offer a different look at your financial history. The will provide copies of this info to creditors as well. You will want to be sure that the information in these reports is accurate. If you have been previously turned down and have not known why, check into this, there may be errors in the report that you can have fixed.