Which type of credit allows you to request a limit increase if payments are made on time?Non-installment creditSecured creditRevolving creditInstallment credit
Question
Which type of credit allows you to request a limit increase if payments are made on time?
- Non-installment credit
- Secured credit
- Revolving credit
- Installment credit
Solution
To determine which type of credit allows you to request a limit increase if payments are made on time, let's analyze the options provided:
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Non-installment credit: Non-installment credit refers to a type of credit where the borrower is not required to make regular fixed payments. This type of credit does not typically offer the option to request a limit increase based on timely payments.
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Secured credit: Secured credit is a type of credit that is backed by collateral, such as a car or a house. While making timely payments on secured credit can positively impact your credit score, it does not necessarily guarantee the ability to request a limit increase.
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Revolving credit: Revolving credit is a type of credit that allows you to borrow up to a certain limit and make payments based on the amount borrowed. This type of credit often offers the option to request a limit increase if payments are consistently made on time. Examples of revolving credit include credit cards and lines of credit.
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Installment credit: Installment credit refers to a type of credit where the borrower agrees to make fixed payments over a specific period of time. Unlike revolving credit, installment credit does not typically offer the option to request a limit increase based on timely payments.
Based on the above analysis, the type of credit that allows you to request a limit increase if payments are made on time is revolving credit.
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