Explain the effect of credit history on the terms of a loan. (1 point)
A negative credit history will mean a lower interest rate.
A positive credit history will mean a higher interest rate.
A positive credit history will mean a lower interest rate.
More information is needed.
The correct answer is: A positive credit history will mean a lower interest rate.
Lenders use a borrower's credit history to assess their creditworthiness and determine the terms of a loan. A positive credit history, indicating a track record of timely payments and responsible borrowing, will typically result in lower interest rates and better loan terms. Conversely, a negative credit history, indicating missed payments or high levels of debt, may result in higher interest rates or difficulty getting approved for a loan.