Events & Promotions
|
|
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized
for You
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Sep 0712:01 AM PDT
-11:59 PM PDT
On the 7th, GMAT Club Tests will be Free! Including all the Quizzes, Questions, and Tests. 12 AM - 11:59 PM PDT
Sep 0712:30 AM EDT
-01:30 AM EDT
Tejas studied hard but kept repeating the same mistakes. After 3 attempts at 645, a focused 4-week strategy helped him identify and fix what was holding him back—leading to a 695 with just 12–15 hours of study per week.- Sep 07
10:00 AM PDT
-11:00 AM PDT
A complete walkthrough of GMAT Club’s free 12-week GMAT study plan: what you study each week, how progress and goals are tracked, how the error log works, and how your practice unlocks paid tools at no cost. 
Sep 0201:00 PM EDT
-11:59 PM EDT
Take 30% off all study plans with code COURSEWORK - Expires on Monday 9/7
Sep 0401:30 AM EDT
-02:30 AM EDT
This Labor Day, turn your hard work into real score gains. From 615→715 in 15 days to 705 in 30 days, our students prove what's possible with personalized, expert guidance. Save up to 25% on 1-on-1 tutoring.
Sep 0410:00 AM EDT
-11:59 PM EDT
We’ve worked incredibly hard to build TTP into the best test prep experience possible, and it would mean a lot to us to win Newsweek’s 2026 Readers’ Choice Award for Best Test Prep. If TTP has helped you, we’d be incredibly grateful for your vote.
Sep 0609:30 AM EDT
-12:30 PM EST
Top scores are possible when you enroll in a powerful EA course, taught live online + 6 months access to TTP OnDemand video courses included! Perfect class schedule and easy course access for working professionals. Class starts Sundays Sept. 6, 2026.- Sep 09
07:00 AM PDT
-10:00 AM PDT
Meet AdComs and explore top Master’s programs - MiM, MiF, MSc, MSBA and more. - Application Fee Waivers - Free 1-Week of GMAT Club Tests: - Master's Application Toolkit - Grand Prize Giveaway - Sep 09
10:00 AM PDT
-11:00 AM PDT
Three MBA applications. Three rejections. No interview invites. A year later, Aman was admitted to Cambridge Judge, SMU, and IMD. In this episode of MBA Admit Stories, Aman shares how he rebuilt his MBA application... 
Sep 1008:00 PM PDT
-09:00 PM PDT
Free- full-length test + 15 concept videos + 150+ short videos + study plan!
Sep 1507:00 PM EDT
-09:00 PM EST
Elite scores are possible when you enroll in a powerful GMAT course, taught live online + 6 months access to TTP OnDemand video courses included! Class starts Tues/Thurs Sept. 15, 2026 - Nov. 15, 2027, 7:00pm-9:00pm EST
Sep 2108:00 PM EDT
-10:00 PM EDT
Boost your GMAT score in less than one month in a live online class + 6 months access to TTP OnDemand video courses included! Class starts Mon, Tues, Wed, Thur, Fri Sept. 21, 2026 - Oct. 9, 2027, 7:00pm-10:00pm EST
17 Aug 2026, 13:42
Kudos
Bookmarks
A
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
55%
(hard)
Question Stats:
60% (01:51) correct
40%
(01:53)
wrong
based on 135
sessions
History
Date
Time
Result
Not Attempted Yet
One of the things lenders do in evaluating the risk of a potential borrower defaulting on a loan is to consider the potential borrower's credit score. In general, the higher the credit score, the less the risk of default. Yet for mortgage loans, the proportion of defaults is much higher for borrowers with the highest credit scores than for other borrowers.
Which one of the following, if true, most helps to resolve the apparent discrepancy in the statements above?
(A) Mortgage lenders are much less likely to consider risk factors other than credit score when evaluating borrowers with the highest credit scores.
(B) Credit scores reported to mortgage lenders are based on collections of data that sometimes include errors or omit relevant information.
(C) A potential borrower's credit score is based in part on the potential borrower's past history in paying off debts in full and on time.
(D) For most consumers, a mortgage is a much larger loan than any other loan the consumer obtains.
(E) Most potential borrowers have credit scores that are neither very low nor very high.
Which one of the following, if true, most helps to resolve the apparent discrepancy in the statements above?
(A) Mortgage lenders are much less likely to consider risk factors other than credit score when evaluating borrowers with the highest credit scores.
(B) Credit scores reported to mortgage lenders are based on collections of data that sometimes include errors or omit relevant information.
(C) A potential borrower's credit score is based in part on the potential borrower's past history in paying off debts in full and on time.
(D) For most consumers, a mortgage is a much larger loan than any other loan the consumer obtains.
(E) Most potential borrowers have credit scores that are neither very low nor very high.
18 Aug 2026, 19:45
Kudos
Bookmarks
One of the things lenders do in evaluating the risk of a potential borrower defaulting on a loan is to consider the potential borrower's credit score. In general, the higher the credit score, the less the risk of default. Yet for mortgage loans, the proportion of defaults is much higher for borrowers with the highest credit scores than for other borrowers.
Which one of the following, if true, most helps to resolve the apparent discrepancy in the statements above?
The paradox is that higher credit scores generally indicate lower risk, yet mortgage borrowers with the highest scores default more often. The best explanation is that lenders may screen this particular group less carefully for other risk factors, allowing unusually risky borrowers into the highest-credit-score group.
(A) Mortgage lenders are much less likely to consider risk factors other than credit score when evaluating borrowers with the highest credit scores.
Correct. The important phrase is “much less likely.” Lenders do not neglect other risk factors equally for all borrowers. They scrutinize borrowers with lower credit scores more carefully, but may rely heavily on the excellent credit scores of the highest-score borrowers. As a result, some borrowers in that group may receive mortgages despite having other serious risk factors, helping explain their unexpectedly high default rate.
(B) Credit scores reported to mortgage lenders are based on collections of data that sometimes include errors or omit relevant information.
Incorrect. This problem can affect borrowers at any credit-score level, so it does not explain why the highest-score group specifically has a higher default rate.
(C) A potential borrower's credit score is based in part on the potential borrower's past history in paying off debts in full and on time.
Incorrect. This helps explain why high credit scores normally indicate lower risk, but not why the pattern is reversed for mortgage borrowers.
(D) For most consumers, a mortgage is a much larger loan than any other loan the consumer obtains.
Incorrect. This applies to mortgage borrowers generally and does not explain why borrowers with the highest credit scores default more often than other mortgage borrowers.
(E) Most potential borrowers have credit scores that are neither very low nor very high.
Incorrect. This concerns how credit scores are distributed, not why default rates are unusually high among borrowers with the highest scores.
Answer: (A)
Which one of the following, if true, most helps to resolve the apparent discrepancy in the statements above?
The paradox is that higher credit scores generally indicate lower risk, yet mortgage borrowers with the highest scores default more often. The best explanation is that lenders may screen this particular group less carefully for other risk factors, allowing unusually risky borrowers into the highest-credit-score group.
(A) Mortgage lenders are much less likely to consider risk factors other than credit score when evaluating borrowers with the highest credit scores.
Correct. The important phrase is “much less likely.” Lenders do not neglect other risk factors equally for all borrowers. They scrutinize borrowers with lower credit scores more carefully, but may rely heavily on the excellent credit scores of the highest-score borrowers. As a result, some borrowers in that group may receive mortgages despite having other serious risk factors, helping explain their unexpectedly high default rate.
(B) Credit scores reported to mortgage lenders are based on collections of data that sometimes include errors or omit relevant information.
Incorrect. This problem can affect borrowers at any credit-score level, so it does not explain why the highest-score group specifically has a higher default rate.
(C) A potential borrower's credit score is based in part on the potential borrower's past history in paying off debts in full and on time.
Incorrect. This helps explain why high credit scores normally indicate lower risk, but not why the pattern is reversed for mortgage borrowers.
(D) For most consumers, a mortgage is a much larger loan than any other loan the consumer obtains.
Incorrect. This applies to mortgage borrowers generally and does not explain why borrowers with the highest credit scores default more often than other mortgage borrowers.
(E) Most potential borrowers have credit scores that are neither very low nor very high.
Incorrect. This concerns how credit scores are distributed, not why default rates are unusually high among borrowers with the highest scores.
Answer: (A)
18 Aug 2026, 20:59
Kudos
Bookmarks
I don't agree with the OA
How does A explain why borrowers with higher credit score have higher default rates when compared to other borrowers ?
A explains that mortgage officers neglect factors other than credit history but that would be true of all groups so doesn't explain why only high credit groups would have a higher default if it's neglected for all groups.
Bunuel ?
How does A explain why borrowers with higher credit score have higher default rates when compared to other borrowers ?
A explains that mortgage officers neglect factors other than credit history but that would be true of all groups so doesn't explain why only high credit groups would have a higher default if it's neglected for all groups.
Bunuel ?
