According to the material, what effect does a higher credit score have on lenders?

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Multiple Choice

According to the material, what effect does a higher credit score have on lenders?

Explanation:
A higher credit score signals lower risk to lenders. When someone shows they’re more likely to repay loans, lenders view them as a safer bet, which often leads to better loan terms and, most commonly, lower interest rates. So the effect on lenders is that the borrower is seen as lower risk. The other ideas don’t fit because a higher score doesn’t indicate more risk, it doesn’t have no effect, and it doesn’t automatically mean higher interest rates—in fact, the opposite is typical: better scores usually mean cheaper borrowing.

A higher credit score signals lower risk to lenders. When someone shows they’re more likely to repay loans, lenders view them as a safer bet, which often leads to better loan terms and, most commonly, lower interest rates. So the effect on lenders is that the borrower is seen as lower risk.

The other ideas don’t fit because a higher score doesn’t indicate more risk, it doesn’t have no effect, and it doesn’t automatically mean higher interest rates—in fact, the opposite is typical: better scores usually mean cheaper borrowing.

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