General Education Development (GED) Practice Exam

A consumer's credit score is directly influenced by which of the following factors?

1. Debt repayment history

2. Employment history over the last five years

3. Marital status

4. Income level

The correct answer is: Debt repayment history

A consumer's credit score is primarily influenced by their debt repayment history. This factor represents how reliably an individual pays back borrowed money and responsibilities. It accounts for a significant portion of the credit score calculation as it indicates to lenders the likelihood of future repayment behaviors. A consistent history of making on-time payments reflects positively, while late payments, defaults, or bankruptcies can substantially lower a credit score. The other factors listed, such as employment history, marital status, and income level, do not have a direct impact on credit scores. While these aspects may contribute to a consumer's overall financial health and ability to secure loans, they are not considered in the credit scoring algorithms that lenders use to assess creditworthiness. Understanding the importance of repayment history can empower consumers to focus on maintaining a positive financial record, thus improving their credit scores over time.