Question

How might the recent practice of credit score tracker Experian, adding monthly rent as one of its criteria for calculating a credit score, benefit some consumers who have filed for personal bankruptcy?

A) It may help them secure lower interest rates on loans.
B) It may increase their chances of filing for bankruptcy again.
C) It may negatively impact their credit score.
D) It may result in financial instability.

Answer 1

Including monthly rent as a criteria for calculating a credit score can benefit consumers who have filed for personal bankruptcy by securing lower interest rates, helping them rebuild their credit score, and demonstrating financial stability.

Step-by-step explanation:

Adding monthly rent as a criteria for calculating a credit score can benefit consumers who have filed for personal bankruptcy in several ways. First, it may help them secure lower interest rates on loans. By demonstrating a positive payment history with their rent payments, these consumers can show lenders that they are responsible borrowers. Second, it may help them rebuild their credit score more quickly. By consistently paying their rent on time, they can improve their creditworthiness and increase their chances of being approved for future credit. And finally, it may help them demonstrate financial stability. By including rent in the credit score calculation, lenders can see that these consumers are meeting their housing expenses, which is an important factor in determining creditworthiness.