Question

Why are applications for new credit a concern for credit companles?

O They could see that they need to give you a larger credit line.
O They show you are shopping with other companies and not them.
O They should not be, since you are establishing credit.
They show an extension of debt.

Answer 1

Answer: They show an extension of debt.

Step-by-step explanation:

Generally speaking, the more debt a person has, the less the likelihood of them being able to pay the entire debt back because it might become too much for them.

For this reason, credit companies generally frown on people taking out more debt which is why when a person applies for new credit, credit companies mark down a person's credit rating to show that the person's risk of not paying back their existing loans has increased.