why are interest rates higher for people with low credit scores?

Question

I’m asking specifically about people in the U.S. looking to borrow from a lender.

In: 0

Answer 1

Because banks have the power to do so. Poor people have less options for money, so are exploitable. The banks claim there is additional “risk”. But it comes down to that banks can make more money be charging more, and since they can they do.