Which statement describes a risk of taking on debt? (1 point)

Question

• It allows you to buy things now and pay later.
It does not affect your credit score if you pay it off in a timely manner.
• It could affect your ability to take out other loans.
• It might result in the interest rates on other loans to increase.

Answer 1

The statement that describes a risk of taking on debt is:

• It could affect your ability to take out other loans.

This is because taking on too much debt can lead to a higher debt-to-income ratio, which lenders may view as a risk when considering new loan applications.