QUESTION IMAGE
Question
which situation would not improve a credit score?
making all loan payments on time
keeping older accounts open and in good standing
opening many new accounts
paying off credit card debt
Brief Explanations
To determine which situation does not improve a credit score, we analyze each option:
- Making all loan payments on time: Timely payments are a key factor in improving credit scores as they show responsible credit behavior.
- Keeping older accounts open and in good standing: Older accounts with a good history can positively impact credit age and history, helping improve the score.
- Opening many new accounts: Opening multiple new accounts in a short period can be seen as a sign of financial distress or risky behavior, and it can lower the average age of credit accounts, which may negatively affect the credit score (or at least not improve it).
- Paying off credit card debt: Reducing debt, especially credit card debt, lowers credit utilization, which is a significant factor in credit scoring and helps improve the score.
So, opening many new accounts is the situation that would not improve a credit score.
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C. opening many new accounts