International Baccalaureate (IB) Practice Exam

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Prepare for the International Baccalaureate with our quiz. Hone your skills with multiple-choice questions and detailed explanations. Excel in your IB exams!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What is the primary purpose of a credit score?

Your income level
The amount of money you have in the bank
The risk of your not repaying debt
Your financial success

The correct answer is: The risk of your not repaying debt

The primary purpose of a credit score is to evaluate the risk of an individual not repaying their debts. Credit scores are numerical representations based on an individual's credit history and financial behavior, including payment history, amounts owed, length of credit history, new credit accounts, and types of credit used. Lenders and financial institutions utilize this score to determine the likelihood that a borrower will default on a loan. A higher credit score indicates a lower risk to lenders, which often leads to better borrowing terms like lower interest rates. By assessing the risk involved in lending money to a specific individual, credit scores help guide lending decisions and shape financial relationships.