Ivan is applying for a mortgage to purchase his first home. His credit rating is poor due to several late payments on his credit cards and car loan. He is upset because his friend Jerry-who has excellent credit-was approved for a loan, whereas Ivan was rejected. Which of the following best describes the mortgage company's actions?
A) unethical-both Ivan and Jerry should have received credit regardless of their credit histories
B) ethical-because credit history is an important factor in credit decisions
C) illegal-all consumers are entitled by law to credit approval
D) unethical-if Jerry is employed and Ivan is not

Question

Quizplus · Accepted Answer

Credit history is a significant factor in credit decisions, and lenders have the right to denycredit to consumers with a poor credit score. Ivan's application was rejected because of his late payments on his credit cards and car loan, which demonstrates his inability or unwillingness to pay his debts on time, making him a higher credit risk. As a result, the mortgage company's decision is ethical. Thus options A, C, and D are incorrect.

Ivan Is Applying for a Mortgage to Purchase His First