Banking · Credit Scoring & Risk Assessment
What is the primary impact on a borrower's credit score when they make multiple new credit applications within a short time frame while maintaining high credit utilization?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The score is unaffected unless the borrower holds more than 10 credit cards.
- 2The score remains neutral as utilization is only calculated for corporate borrowers.
- 3The score decreases because multiple hard inquiries combined with high utilization reflect credit hunger and increased default risk.✓
- 4The score increases because high credit demand signals high creditworthiness.
Correct answer
The score decreases because multiple hard inquiries combined with high utilization reflect credit hunger and increased default risk.
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