Skip to content

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

Which statement about a credit score such as the CIBIL score is most accurate for debt management advice?

A higher credit score indicates a better credit history and lower default risk, so lenders generally offer loans on easier terms and lower interest rates. The score reflects repayment behaviour and credit usage, not just income, and it is not reset on loan closure.

  1. AA higher score indicates a better credit history and generally helps get loans at lower ratesCorrect
  2. BA lower score is preferred by lenders because it shows the borrower is cautious with credit
  3. CThe score is determined only by the borrower's income level
  4. DThe score is reset to zero every time a loan is closed

Explanation

Credit scores summarise repayment history and credit behaviour, typically ranging from 300 to 900. A higher score signals lower default risk, so lenders often offer better terms. Income is not the sole determinant, and closing a loan does not reset the score.

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