Consider the following statements:
Statement 1: When the dealer is borrowing cash and providing collateral, it is known as a reverse repo.
Statement 2: The greater the credit risk in the collateral, the higher the repo rate.
Which of the following is most likely?

Standard practice is to define the transaction based on the perspective of the dealer. If the dealer is borrowing cash and providing collateral, it is known as a repurchase agreement. If the dealer is lending cash and accepting collateral, it is known as a reverse repurchase agreement.
Statement 2 is indeed correct. Repo rates increase with the level of credit risk in the collateral.