Question

Which phrase best completes the diagram?
?
A person's credit score
gets worse.
O A. A person spends part of a credit card's credit limit.
B. A person files for bankruptcy to remove debts.
C. A person uses his or her savings to buy a new car.
D. A person pays the full balance of a credit card.

Answer 1

The best option for what reduces a person's credit score is B. A person files for bankruptcy to remove debts.

There are several things that can reduce a person's credit score such as:

• Filing for bankruptcy to get debts wiped away
• Defaulting on debt
• Failing to pay debt interest on time

When a person uses bankruptcy to get rid of debt, they have essentially defaulted on their debt and so they will lose credit score points as a result.

In conclusion, filing bankruptcy causes a person's credit score to fall.

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