Which of the following is a benefit of having a good credit score?

• A. Lower interest rates on loans and credit cards
• B. Higher monthly loan payments
• C. Increased likelihood of loan denial
• D. Limited access to financial products

Answer: (A)

Verified step by step guidance

1. Understand the concept of a credit score: A credit score is a numerical representation of an individual's creditworthiness, based on their credit history. It helps lenders assess the risk of lending money to a borrower.
2. Recognize the benefits of a good credit score: A good credit score indicates that a borrower is reliable in repaying debts, which can lead to favorable financial opportunities.
3. Analyze the options provided: Lower interest rates on loans and credit cards, higher monthly loan payments, increased likelihood of loan denial, and limited access to financial products.
4. Evaluate each option: A good credit score typically results in lower interest rates on loans and credit cards because lenders view the borrower as less risky. Conversely, higher monthly loan payments, increased likelihood of loan denial, and limited access to financial products are associated with poor credit scores.
5. Conclude that the correct benefit of having a good credit score is 'Lower interest rates on loans and credit cards,' as it directly reflects the advantages of being seen as a trustworthy borrower.