Allison is looking to buy a new car but has a low credit score. Which of the following statements is FALSE?

She can get pre-approved for loans with good terms and use them to negotiate for a good loan with the dealership

She is more likely to get a loan with a low interest rate

She is more likely to get a loan with a high interest rate

She may not be approved for the loan at all

Question

Alexus Cook

Business

1 September, 22:43

Allison is looking to buy a new car but has a low credit score. Which of the following statements is FALSE?

She can get pre-approved for loans with good terms and use them to negotiate for a good loan with the dealership

She is more likely to get a loan with a low interest rate

She is more likely to get a loan with a high interest rate

She may not be approved for the loan at all

+3

Answers (1)

Know the Answer?

Ashlynn · Answer 1

The correct answer is letter "B": She is more likely to get a loan with a low interest rate.

Explanation:

People with a low credit score are considered riskier for financial institutions. Whether they have fallen into debt in the past or have little to no payment history, thus, banks cannot clearly determine if they are able to make the repayment of their debts or not.

Then, individuals with a low credit score are unlikely to obtain loans - if they do - with low-interest rates.