4
QuizMultiple Choice

Bankruptcy — Quiz

Question 4 • Personal Finance

A positive credit history is vital for a healthy financial future. Which of these is an accurate statement about credit scores?

Answer
A
Defaulting on loans has no effect on credit scores or future borrowing potential.
B
Credit scores are determined solely by income level and employment status.
C
Closing credit accounts improve credit scores and boosts financial health.
D
Credit scores reflect an individual's creditworthiness and ability to manage debt.

Explanation

A credit score summarizes how reliably someone has used and repaid credit, so it helps lenders assess creditworthiness and debt management. Defaults can damage scores, and scores are not based solely on income or employment. Closing accounts may even lower a score in some cases, so choice D is the accurate statement.

AI-written and checked against the verified answer.

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