If Tony continues to make late payments, which of the following is most likely to occur?

• A. He will receive a tax refund.
• B. His credit score will decrease.
• C. His interest rates may increase.
• D. He will avoid all late fees.

Answer: (C)

Verified step by step guidance

1. Understand the impact of late payments on financial obligations. Late payments can negatively affect a person's creditworthiness and financial standing.
2. Review the concept of a credit score. A credit score is a numerical representation of an individual's creditworthiness, and late payments are one of the factors that can lead to a decrease in this score.
3. Examine the relationship between credit scores and interest rates. A lower credit score may result in higher interest rates on loans and credit cards, as lenders perceive the individual as a higher risk.
4. Consider the consequences of late payments, such as late fees. Late payments typically incur penalties, which are additional charges added to the outstanding balance.
5. Conclude that late payments do not lead to benefits like tax refunds or avoiding fees. Instead, they result in negative outcomes such as decreased credit scores and potentially higher interest rates.