Question

QUESTION 9 / 10

Which of the following statements is TRUE?
A. People with low credit scores are usually low-risk
borrowers.
B. The longer you use credit responsibly, the higher your
credit score will be.
C. Applying for several credit cards in one year can help
increase your credit score.
D. Paying off your entire credit card balance can lower
your credit score.

Answer 1

B

Step-by-step explanation:

Hello!

Let's analyze the statements and gather the accuracy of each response.

Note, that a higher credit score is good, and a lower one is bad.

A) People with low credit scores are usually very reckless with their money and their credit cards; therefore, they are high-risk borrowers to people who give them loans because they might never pay them back (which resulted in the low credit score to begin with)

B) The longer you use your credit card and pay on time, the more your credit score will rise. This is a very factual statement.

C) Applying for several credit cards can actually lower your credit score. If you have so many credit cards, you might end up forgetting to pay one, which lowers it, or with improper account management.

D) Paying off your credit card is good...so why would it lower a credit score?