Question

Which best describes secured credit?

A) it is backed by a valuable asset
B) it carries no risk for the lender
C) it can be easily obtained
D) it limits a borrower’s debt

Answer 1

It is backed by a valuable asset,

which is also known as secured credit.

Answer 2

Answer: A) it is backed by a valuable asset

Explanation:

Secured credit refers to loan or credit that is backed by a secured payment used as collateral on the account. It involves an agreement for a lender to take a particular asset of value from the borrower if they are unable to pay back the credit. Secured credit cards are given to borrower with limited credit history.