Question

A customer has a history of non-payment of monthly utility bills. The customer applies for credit. Which response should the customer expect from the lender?

O Denial of a line of credit
O Extension of a higher credit limit
Award of an increased credit score
O Offer of a large loan

Answer 1

The customer with a history of non-payment of monthly utility bills should expect the denial of a line of credit from the lender.

Non-payment of monthly utility bills is an indication of a low credit score, which indicates a higher risk of defaulting on loan payments. Lenders typically avoid extending credit to individuals with a history of non-payment or late payments, as they are considered high-risk borrowers. Hence, it is unlikely that the lender will approve the customer's application for credit, and if approved, the credit limit may be lower than what the customer expects.

Answer 2

A. Denial of a line of credit

Step-by-step explanation:

A customer who has a history of non-payment of monthly utility bills should expect a denial of a line of credit from the lender. Non-payment of bills indicates a poor credit history, which is a significant factor that lenders consider when determining a borrower's creditworthiness. If the lender perceives the customer as high risk, they are less likely to extend a line of credit or offer a large loan. Therefore, option A is the correct response the customer should expect.