Question

multiple choice 1 point
which of the following is true about loans and credit scores in general?
lower credit scores typically mean the risk of loan default is lower.
higher credit scores typically mean the risk of loan default is lower.
lower credit scores typically lead to more favorable interest rates.
higher credit scores typically lead to less favorable interest rates.
essay 1 point
what does it mean to default on a loan?

Explanation:

Credit scores are an indicator of creditworthiness. Higher scores imply lower default risk, so lenders offer more favorable (lower) interest rates. Lower scores mean higher default risk, leading to less favorable (higher) interest rates.

Answer:

Higher credit scores typically lead to less favorable interest rates.