Finance
A North Dakota borrower's credit score significantly affects their mortgage rate because:
ANDREC sets rates based on credit scores
BLenders use credit scores to assess default risk and price loans accordingly—lower scores typically result in higher rates✓ Correct
CThe Bank of North Dakota requires a minimum credit score of 750
DFederal law mandates credit score-based pricing
Explanation
Lenders use credit scores (like FICO) as a risk assessment tool. Borrowers with lower scores are considered higher risk, leading lenders to charge higher interest rates (risk-based pricing) to compensate for the greater chance of default.
Related North Dakota Finance Questions
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