Credit Scores and Your Financial Future

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  • Lesson Identification and TEKS Addressed

    Cluster : Career Development

    Course : Career Portals: Middle School

  • TEKS Student Expectations

    • (5) The student understands personal financial management and recognizes the value of personal fiscal responsibility. The student is expected to:
      • (F) list the qualifications and procedures to obtain and improve credit scores
      • (H) examine the effects of poor credit scores as they relate to personal finance and career opportunities
  • Basic Direct Teach Lesson

    Instructional Objectives

    Students will:

    • understand ways to obtain credit scores
    • develop an understanding of the effects poor credit will have on their financial future
    • determine actions to take to improve credit scores
  • Rationale

    Script:

    As we briefly discussed in the previous lesson, you must have a good credit history and good credit score in order to be approved for forms of credit. Because a bad credit score can have a long-term effect on your financial future, it is important to make sure you understand how to maintain a good credit history, obtain your score and ways to improve your credit score.

  • Duration of Lesson

    One 45 minute class period

  • Word Wall

    Bankruptcy: The inability of an individual to secure any more money from a bank

    Credit Bureaus: A company that collects information relating to the credit ratings of individuals and makes it available to credit card companies and financial institutions

    Credit Report: A record of an individual’s or company’s past borrowing and repaying, including information about late payments and bankruptcy

    Credit Risk: An investor’s risk of loss arising from a borrower who does not make payments as promised

    Credit Score: A number assigned to a person that indicates to lenders their capacity to repay a loan

    Default: Failure to fulfill an obligation

    Delinquent: Past due

    Outstanding Balance: The amount of money owed, (or due), that remains in a deposit account (or a loan account) at a given date, after all past remittances, payments and withdrawals have been accounted for

    Repossess: Retake possession of (something) when a buyer defaults on payments

  • Materials/Specialized Equipment Needed

    Equipment:

    • computer with projector for PowerPoint™ presentation
    • copies of handouts (see All Lesson Attachments tab)
    • access to a computer lab with internet access
  • Anticipatory Set

    Before class begins:

    Access a commercial for freecreditreport.com on YouTube and play at the beginning of class. Once the commercial is over, distribute handout, Credit Scores Do’s and Don’ts (see All Lesson Attachments tab). Students will write down factors effecting credit scores and ways to improve credit scores.

  • Direct Instruction with Special Education Modifications/Accommodations

    Introduce PowerPoint™, Credit Scores and Your Financial Future (see All Lesson Attachments tab). Students will be expected to take notes and follow along throughout the presentation.

    Individual Education Plan (IEP) for all special education students must be followed. Examples of accommodations may include, but are not limited to:

    • checking for understanding
    • providing assistance with note-taking
    • supplying student with a copy of the PowerPoint™ presentation

  • Guided Practice with Special Education Modifications/Accommodations

    Present the last slide of the PowerPoint™, Credit Scores and Your Financial Future (see All Lesson Attachments tab). Instruct students to read over the scenario. When students are finished, lead the class in a discussion identifying factors effecting the credit score.

    Individual Education Plan (IEP) for all special education students must be followed. Examples of accommodations may include, but are not limited to:

    • checking for understanding
    • highlighted materials for emphasis
    • frequent feedback

  • Independent Practice/Laboratory Experience with Special Education Modifications/Accommodations

    Distribute handout, What’s the Score (see All Lesson Attachments tab) and have students complete the handout indivdually using the Credit Score Estimator from http://www.whatsmyscore.org/estimator/. Keep students focused and on task while monitoring their work.

    Individualized Education Plan (IEP) for all special education students must be followed. Examples of accommodations may include, but are not limited to:

    • providing peer tutoring
    • extended time to complete the assignment
    • highlighted materials for emphasis

  • Lesson Closure

    Have students take out the handout, Credit Scores Do’s and Don’ts and add more information to the chart. Discuss their responses as a class.

  • Summative/End of Lesson Assessment with Special Education Modifications/Accommodations

    Using their understanding of the importance of credit scores, students will write an essay explaing why credit scores are obtained and explain their plan for achieving a good credit score, as well as determine ways to improve a poor credit score.

    Individualized Education Plan (IEP) for all special education students must be followed. Examples of accommodations may include, but are not limited to:

    • graphic organizer to help outline thoughts
    • extended time to complete the assignment
    • do not grade for spelling

  • References/Resources

    Website:

    • Credit Bureaus
      There are three major credit bureaus, all who use the FICO model to calculate credit scores. Each bureau compiles their own credit reports, so it is important to check your report from each of them to ensure against inaccuracies and fraud.
      http://www.whatsmyscore.org/resources/bureaus.php
    • Free Annual Credit Report
      By federal law, each of the 3 major credit bureaus is required to provide you with one free copy per year of your credit report (though not your credit score) upon request. It is important to review this information not only to track and improve your financial health, but also to ensure against fraud and identity theft.
      http://www.whatsmyscore.org/resources/freereport.php
    • Take Control of Your Credit Score
      This brochure covers all of the essentials of credit scoring. Learn what a credit score is, how it’s calculated, why it’s important, and tips on how to improve your score and keep it in top form.
      http://www.whatsmyscore.org/downloads/pdf/WMS_brochure.pdf
  • Additional Required Components

    English Language Proficiency Standards (ELPS) Strategies

  • College and Career Readiness Connection

    AchieveTexas Career Cluster Crosswalks

    The Career Cluster Crosswalks housed on the AchieveTexas website http://www.achievetexas.org/index.html provide Texas teachers with a direct connection between their CTE course TEKS and the College and Career Readiness Standards (CCRS). Language Arts, Mathematics, Science, Social Studies, and Cross-Disciplinary integration are the focus of the CCRS. These college and career readiness standards are essential in the planning and delivery of CTE lessons. The extent to which the integration occurs is determined by the methods and strategies utilized by each teacher.

    Career Cluster Crosswalks for Education and Training, Hospitality and Tourism, and Human Services Career Clusters can be found at:
    http://www.achievetexas.org/Career%20Cluster%20Crosswalks.htm

  • Recommended Strategies

    Reading Strategies

    Print a class set or if you have access to a computer lab, allow students to read the article “Your Credit History“or other lesson related article.
    http://www.themint.org/teens/your-credit-history.html

    Prior to reading, provide students with the title of the article and allow students to use the pre-reading strategy “prediction”. Ask questions such as, “What information do you think will be in this article?” and “Why do you think that?”

    Once students are provided with the article, prior to reading, have them scan the content and note words that are unfamiliar to them. As a class, decode all unfamiliar words. New terms may be added to the word wall.

    Encourage students to connect reading to their life experiences or prior knowledge.
  • Quotes

    A person’s credit report is one of the most important tools consumers can use to maintain their financial security and credit rating, but for so long many did not know how to obtain one, or what to do with the information it provided.
    -Ruben Hinojosa

    Your credit score is 100% based on you borrowing money and paying it back with interest on time. It’s not based on you doing smart things financially. It’s based on you loving debt.
    -Dave Ramsey

  • Multimedia/Visual Strategies

    PowerPoint™:

    • Credit Scores and Your Financial Future

    Websites:

  • Graphic Organizers/Handout

    Graphic Organizer:

    • Credit Score Do’s and Don’ts

    Handouts:

    • What’s the Score
  • Writing Strategies

    Journal Entry:

    • My parents needed to have a good credit score when…

    Writing Strategy:

    • RAFT (Role/Audience/Format/Topic) writing strategy:
      Role: loan officer
      Audience: prospective car buyer
      Format: formal letter
      Topic: improving credit score

    You have just received an application for a car loan, but the applicant has a low credit score. Write a letter informing the applicant that their request was denied and provide them with some tips for improving their credit score.

  • Communication 90 Second Speech Topics

    • How a low credit score could affect my future
    • What are some factors that contribute to a low credit score?
  • Other Essential Lesson Components

    Enrichment activity

    Listen to the Podcast from Practical Money Skills and discuss with class.

  • Family/Community Connection

    Create a handout informing parents and other adults within the community about ways to obtain a free credit report, factors affecting credit scores and ways to improve scores.

  • CTSO connection

    STAR Events:

    • Applied Technology- An individual or team event: Recognizes participants who develop a project using technology that addresses a concern related to Family Consumer Sciences and/or related occupations. The project integrates and applies content from academic subjects.
    • Chapter Service Project (Display and Manual): A team event – Recognizes chapters that develop and implement an in-depth service project that makes a worthwhile contribution to families, schools, and communities. Students must use Family Consumer Sciences content and skills to address and take action on a community need.
  • Service Learning Projects

    Successful service learning project ideas originate from student concerns and needs. Allow students to brainstorm about service projects pertaining to lesson. For additional information on service learning see:

    http://www.servicelearning.org

    Also see Family/Community Connection.