Skip to content

NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Debt Management and Loans

A credit score such as the CIBIL score is primarily used by lenders to assess which of the following?

A credit score summarises a borrower's creditworthiness using past repayment behaviour and credit usage, as reported to credit information companies. Lenders use it to decide approval and pricing. It does not value collateral, predict salary or set policy rates.

  1. AThe borrower's creditworthiness based on past repayment behaviourCorrect
  2. BThe market value of the borrower's collateral
  3. CThe borrower's expected future salary growth
  4. DThe RBI repo rate applicable to the borrower

Explanation

Credit scores are derived by credit information companies from repayment history, credit utilisation and enquiries. They indicate creditworthiness. They do not value collateral, forecast salary or set the repo rate.

Did you get it right without looking?

One question tells you little. A timed set on Debt Management and Loans shows your real accuracy, how long you take and where you lose marks.

Practise Debt Management and LoansFree diagnostic mock

More Debt Management and Loans questions