Question

Explain the effect of credit history on the terms of a loan.(1 point) Responses A positive credit history will mean a higher interest rate. A positive credit history will mean a higher interest rate. More information is needed. More information is needed. A negative credit history will mean a lower interest rate. A negative credit history will mean a lower interest rate. A positive credit history will mean a lower interest rate.

Answer 1

[AI-generated answer — Bot GPT 3.5]

A positive credit history typically results in better loan terms, including a lower interest rate, higher loan amount, and longer repayment period. Lenders view individuals with good credit as less risky borrowers, so they are more likely to offer favorable terms. On the other hand, a negative credit history may lead to higher interest rates, lower loan amounts, and shorter repayment periods, as lenders see these individuals as higher risk borrowers. Ultimately, having a positive credit history can save you money in the long run by qualifying you for lower interest rates and better loan terms.