Questions: A good credit history means you have never missed a loan payment and you always pay on time.

A good credit history means you have never missed a loan payment and you always pay on time.
Transcript text: A good credit history means you have never missed a loan payment and you always pay on time.
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Solution

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Answer

False

Explanation

A good credit history is generally characterized by a consistent record of making loan payments on time, but it is not solely defined by never having missed a payment. While never missing a payment is ideal, a good credit history can also include instances where a person may have missed a payment but has since demonstrated responsible credit behavior. Credit history is evaluated based on several factors, including:

Option 1: Payment History

This is the most significant factor in determining credit history. Consistently making payments on time positively impacts credit history, while late payments can have a negative effect.

Option 2: Credit Utilization

This refers to the ratio of credit used to the total credit available. Maintaining a low credit utilization rate is beneficial for a good credit history.

Option 3: Length of Credit History

The longer the credit history, the better, as it provides more data on a person's credit behavior.

Option 4: Types of Credit

Having a mix of different types of credit (e.g., credit cards, installment loans) can positively influence credit history.

Option 5: Recent Credit Inquiries

Frequent applications for new credit can negatively impact credit history, as it may indicate financial instability.

Therefore, while never missing a payment is a strong indicator of good credit history, it is not the sole determinant.

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