Building Credit Early in Life — Important Rules of Thumb

1. Zoom meeting links for this week:

Join Zoom Meeting at 10:00 on TUESDAY 5/26
https://zoom.us/j/2425160447

JUMP$TART NATIONAL STANDARD: Credit and Debt, Standard 3

CEE NATIONAL STANDARD: Using Credit, Standard 1

COMMON CORE STATE STANDARD: CCRA.R.2

CONTENT STATEMENT: Establish rules of thumb to build credit early in life.MATERIALS NEEDED: (included); Building Credit Vocabulary Powerpoint (included)

KEY VOCABULARY/TERMS: Credit, Credit Score, Credit Utilization Rate, Rules of Thumb

1. Students complete the Fact or Myth worksheet, Fact or Myth Worksheet. Students predict how a lack of credit history or bad credit will impact their everyday life. Here is the fact or Myth key Fact or Myth Master 
2. Students read the article “How Credit Impacts Your Day to Day Life” and circle the correct responses.
3. Review the brief article and Infographic on what factors that contribute to building a strong FICO credit score. In the article on the bottom is a short video.“What’s In Your Score?”.
4. Students read the following articles and identify credit building strategies.
   1. “What’s The Best Way to Build My Credit Score?”
   2. “How Do I Get and Keep a Good Credit Score?”
5. Model for students how the complexity of credit building can be coalesced into simple Rules of Thumb* students can remember that are relevant to their lives now, or in the immediate future. Research exhibiting the effectiveness of Rules of Thumb:
6. • Consumer Voices on Financial Rules to Live By. Rep. Consumer Financial Protection Bureau, May 2016. Web. 11 Apr. 2016. <http://files.consumerfinance.gov/f/201603_cfpb_rules-to-live-by_ideas-for-financial-educators.pdf>.
   • Schoar, Antoinette, and Saugato Datta. The Power of Heuristics. Rep. Ideas42, Jan. 2014. Web. 12 Apr. 2016. <http://www.ideas42.org/wp-content/uploads/2015/05/ideas42_The-Power-of-Heuristics-2014-1.pdf>.
7. Distribute to students the CFPB document MY Credit Rules to Live By click here CFPB Credit Rules to Live By as an example of the process of establishing a rule of thumb. Encourage students to use what they learned from the credit building articles, the FICO scoring model, and if applicable a prior lesson on credit reports, when developing their own rules of thumb.

8. DO THIS EXIT TICKET WHEN DONE,CLICK HERE

Enrichment reading:

• “Zina Kumok: ‘Getting My First Credit Card Was So Exciting’”
• “When It Comes to Student Loans, It Pays to Finish Your Degree”
• “The Power of Plastic: What to Know about What You Owe”
• “Take Command of Your Credit Score”
• “Killing the ‘Cockroaches’ of Myths about Money”
• “Getting Creative with Money”
• “Educator Toolkit: Paying for College”
• “Digital-age Danger: Learning to Protect Your Identity”
• “Credit Alert: The Dangers of Overspending and Underpaying”