Option (A) is correct.
<u>A person can charge all monthly expenses to the same credit card to increase his/her credit score.
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Further Explanation:
Credit score: A credit score represents the creditworthiness of an individual based on their financial transaction history. If a person has a sound and on-time payment records, then he would have a high credit score and vice versa.
Low credit score means that a person is not paying their bills and dues on time. The credit score is used by the lenders to assess the capability of the borrower to repay the debt. Generally, lenders do not prefer to lend money to the person with a low credit score.
Maintaining a high credit score:
A high credit score can be achieved in the following cases:
• The Payment of the minimum credit card dues on time.
• The advance payment of the entire balance.
• Lump-sum payment of the total credit card balance
• Increase the use of the credit card.
Justification for the correct and incorrect options:
A.
Charge all monthly expenses to the same credit card: This is the correct option.
When the cardholder spends all monthly expenses form his/her credit card, the credit card utilization rate increases. The credit score increases in case of increase in the use of the credit card and timely payment of the dues.
B.
Use only a small percentage of your credit limit: This is an incorrect option.
The use of a small portion of the credit limit would not help in the increase in the credit score because the credit card should be used more often to increase the payment.
C.
Research student loan terms online: This is an incorrect option.
Research for loans does not affect the credit score.
D.
Open a saving account at a bank: This is an incorrect option.
The bank account has the savings of a person. It does not deal in the credit card. Therefore, it cannot be used for increasing the credit score of an individual.
Learn more:
1. Learn more about the activity preferred for buying a car on installments
brainly.com/question/3110450
2. Learn more about maintaining the high credit score
brainly.com/question/1218973
3. Learn more about various approaches to increase the credit score
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Answer details:
Grade: High School
Subject: Business Studies
Chapter: Money & Banking
Keywords: What can a person, help, increase, their, credit score, charge, monthly, expenses, same, credit card, use only, small percentage, your, credit limit, research, student, loan, terms, online, open, savings account, at a bank.
