On the QT: Your Credit Score

May 05, 2009

 

Did you know? In these tough times, college students, like others, are accumulating large amounts of credit card debt and dramatically impacting their credit history and their FICO scores. Many students are using their credit cards more than usual in these difficult financial times and may not realize the long term consequences of their debt. They need to understand how to check and maintain a good credit history and build a FICO score that will work to their advantage. In today’s activity, you have an opportunity to introduce students to some of the tools they can use to monitor and protect their credit.

 

Try this:

 

Ask students some questions about credit history and FICO scores.

How many of you have ordered and reviewed your credit reports?
What is a FICO Score?
How many of you know your FICO Score?

 

Show this 3-minute video clip, Do You Know Your FICO Score?

 

Distribute copies of this How to Change Your Score activity adopted from resources at What’s Up in Finance.

Explain the activity and stress the fact that you don’t expect them to know the numbers, you want them to guesstimate how each of Angela’s actions will impact her FICO score.

 

Review and discuss answers. Ask students if anything surprised them about the way her score changed.
If students want more resources about establishing good credit, assign them the online lesson, Fiscal Fitness, at the WBL Connections site.

 

Add an Experience: Because close to twenty percent of all credit reports contain errors, ask your students to go to annualcreditreport.com, the only government mandated, credit reporting agency operated website and order their credit report. With proper identification, students will be able to view their report immediately. Encourage students to review their reports and highlight any discrepancies. In addition, if they want help reading their credit report, suggest they download the free booklet Understanding My FICO® Score. (Students will not get their FICO score without paying an additional fee ... only the credit report is free, but the booklet explains how to read a credit report.) In the next class, discuss what they learned from their reports and how they intend to use the information. In addition, suggest that they work through the credit inquiry and repair process themselves and NOT hire a credit repair service.

 

Quik Quote: Many employers run credit checks on potential new hires before making them a job offer.