Question

credit scores and reports quick check
which of the following actions could improve your credit score?
(1 point)
○ paying down balances on current credit lines
○ defaulting on a loan because you missed several payments already
○ transferring balances to multiple new credit lines
○ closing all your credit line accounts

Explanation:

To determine which action improves a credit score, we analyze each option:

• "Paying down balances on current credit lines" reduces credit utilization (the ratio of used to available credit), which is a key factor in credit scoring. Lower credit utilization generally boosts credit scores.
• "Defaulting on a loan" (missing payments) severely damages credit scores as it shows poor repayment behavior.
• "Transferring balances to multiple new credit lines" can increase the number of credit inquiries (hard pulls) and potentially raise credit utilization if not managed, harming the score.
• "Closing all credit line accounts" reduces available credit and can shorten credit history length, both of which negatively impact credit scores.

Answer:

A. paying down balances on current credit lines