Question

Alex is applying for a new line of credit, and the bank’s lending officer has opened alex’s credit history. according to the report, alex has a loan on his car. he has three credit cards, each with thousands of dollars owed. in addition to his higher-than-average debt, alex has not been making payments on time in recent months. his last two car payments were late, and he has missed a few of his credit card payments completely. given alex’s credit history, consider how the bank will likely view him. the bank is likely to consider alex a borrower. as a result of his financial situation, alex likely has a(n) credit score. if he is granted the loan, his interest rate will most likely be than what others pay.

Answer 1

The bank is likely to consider Alex a High risk borrower. As a result of his financial situation, Alex likely has a low credit score. If he is granted the loan, his interest rate will most likely be higher than what others pay.

What leads to a low credit score?

There are several things that lead to a low credit score such as paying late on loans, having a high amount of money owed, having a relatively short credit history, and applying for new debt.

Alex owes thousands of dollars, have multiple credit cards, and a loan on his car. This means that he has a high amount of money owed and so he will have a low credit score because he is a high risk borrower.

When a person is considered to be a high risk borrower, then they will be charged higher interest rates on loans, compared to what other people with a higher credit score will pay. This higher rate is to compensate the bank for accepting the higher risk of the borrower.

Find out more on credit scores at https://brainly.com/question/11421834

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