4
QuizMultiple Choice

Managing Financial Information

Question 4 • TX-Personal Financial Literacy and Economics

What best explains the relationship between a borrower’s credit score and a down payment requirement?

Answer
A
Someone with a high credit score may be required to make a higher down payment.
B
Someone with a high credit score may be required to make a lower down payment.
C
Someone with a low credit score may be required to make a lower down payment.
D
Someone with a low credit score may not have to make a down payment.

Explanation

A higher credit score generally signals that a borrower is more likely to repay a loan. Lenders may therefore offer better terms, including requiring a smaller down payment. A lower credit score can lead to stricter requirements, not the lower or nonexistent down payment described in choices C and D.

AI-written and checked against the verified answer.

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