Student Activity
Credit Rating and Credit Scores

Goal:

To teach each student the importance of credit reports and credit scores.
To teach students how to order credit reports.

Internet
Paper
Pen
Envelopes (3)
Stamps (3)

Internet
Decision Making
Letter Writing
Research
Discussion
Mathematics
Comparison

Step 1.

Conduct an in class discussion to explain to the students the importance of
having a good credit record and credit score, along with what credit scores
mean and how they can effect one's future.

Talking points may include:

• Activities such as credit cards, charge cards, home loans, auto loans,
  utility companies report your credit ratings.
• Using loans to buy houses, cars, and student loans helps build credit.
• Starting credit in life early is important.
• All credit applications, jobs, payments and history are tracked electronically.
• It is important to pay bills on time.
• Do not overspend, keep your debt / income ratio down.
• Credit mistakes takes years to change.

Step 2.

Have each student fold an 8 ½" x 11" paper (landscape) into two columns.
In the left column have the student identify 5 ways to a improve there credit
report. On the right hand column have the identify five ways a person could
ruin there credit.

Use the blackboard, wipe off board or easel to write the student's answers.
Conduct the as a brain storming session. As a class, determine the top five
answers from each column.

Step 3.

Have each student visit http://www.myfico.com While they are there,
have each student click the calculator link (on the left) and then onto FICO
Score Loan Savings Calculator. Run a comparison on a $100,000, 30 year
fixed loan, using the lowest FICO score and the Highest Score (as the goal).
Write down the differences in the cost for the loan (monthly or in 30 years)
and explain which payment they would like to make and why?

Step 4.

Have each student prepare a letter on behalf of their parents to each credit
reporting company requesting a copy of their credit report (Note: some
may need money). This letter should be typed and signed by the parent(s).

Include in the letter (parents):

• Request for a credit report
• First, Middle and last name (including Jr., Sr. III etc.)
• Current Address
• Previous Address (within the last two years)
• Social Security number
• Date of Birth
• Current Employer
• Phone Number
• Signature
• Applicable Fee

Complete the envelope and mail.

Once mailed, in two to three weeks you will start to receive copies of your credit report.

Teachers: Sample credit reports can be copied from each of the following companies. These have worked for class discussions.

Teacher Resources:
Equifax
PO Box 740241
Atlanta, GA 30374-0214
www.equifax.com

Experian (formally TRW)
PO Box 2002
Allen, TX 75013-2104
www.experian.com
Trans Union LLC

Consumer Disclosure Center
PO Box 1000
Chester, PA 19022
www.transunion.com

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Have a good week.

Timothy Liptrap
Editor, 101 Financial Lessons