Title of Lesson: Understanding Credit Reports and Date: October 20, 2010 Timeframe: 2-50 min. periods
Author(s): Mary Haugen School District: St. Mary’s Springs Academy
Campus: High School
Subject Area(s): Business Education Grade Level(s)/Course: 10, 11, 12/Personal Finance
State Standards Wisconsin Personal Financial Literacy Standards:
B.12.2.2 Describe and calculate interest and fees applied to various forms of spending, debt, and saving.
C.12.4.1 Explain how a “credit score” is used.
C.12.4.2 Explain factors that affect creditworthiness and the purpose of credit records.
C.12.4.3 Apply strategies to avoid or correct credit problems.
Wisconsin Business Education Standards:
B.12.1 Access, navigate, and use on-line services.
B.12.12 Analyze spreadsheet data.
B.12.19 Use electronic mail.
C.12.4 Explain the use of credit cards, bank cards, debit cards, credit ratings, and loan applications.
C.12.5 Construct and read charts, tables, and graphs that summarize data from real world situations.
D.12.3 Explain how consumer legislation may affect consumer product prices.
D.12.6 Explain how interest rates are determined by market forces and how they influence the amount of
borrowing and saving by business investors, consumers, and government officials.
I.12.4 Identify laws governing credit and credit reporting.
Wisconsin Information and Technology Literacy Standards:
A.12.3 Use a computer and productivity software to organize and create information.
A.12.4 Use a computer and communications software to access and transmit information.
B.12.3 Locate and access information sources.
D.12.2 Use information, media, and technology in a responsible manner.
Stated Objective(s) Students will:
Indentify the three credit reporting agencies
Analyze the contents of a credit report
Disseminate the parts of a credit score
Procedures for Lesson 1. Load Credit Scores and Reports PowerPoint presentation (notes, etc.)
2. Ask the Introductory Question—If you borrowed money from a friend, what would she say about your
responsibility in paying her back?
Discuss the responsibilities you have to repay your friend. Would she trust you again?
Discuss how this same scenario dictates your responsibility in paying credit obligations.
3. Proceed with notes about CRAs.
4. Look at the sample credit report.
Ask students what is on a credit report. Write them on the whiteboard.
Ask why things like salary and marital status are not there since they’d be an indication of paying or
5. Have students log on to the computers and access the Citi Bank credit cards site.
Give the students a handout worksheet to answer questions about the credit report at the Citi Bank
cite. (or have students access it from the class wiki)
Discuss the answers so that everyone has them correct. This also will give students an opportunity to
ask if something was unclear (lien, collections, bankruptcy)
Collect the sheet the next class period after the quiz.
6. Payment codes: Review types of credit (open, installment, revolving). Note how they are separated on a credit
7. Discuss how, under the FACT Act, every person can get one free credit report per year from each of the credit
The Pirate Hat link goes to the freecreditreport.com commercials.
Have students listen to what is said in the commercial, plus that the voiceover says it is free with
enrollment in Triple Advantage, which costs about $15.00/month.
The point—this is not the right website and can cost money.
Go to annualcreditreport.com link then show how easy it is to get your credit report. Ask, “What
information is necessary to obtain your credit report?” Look at the online and mail procedures to ask
for the report.
8. FICO credit scores.
Hand out the questions that go with the YouTube videos.
Watch the Fair Isaac and What’s My Credit Score… videos. Have students fill in the answers to the
Look at the FICO score statistics table.
Emphasize the higher scores and ask the students what people have to do to get the higher scores.
Write answers on the whiteboard. Students should have some answers from the videos.
Analyze the pie chart. Students should add information to their notebooks.
9. Who wants to know your credit score?
Discuss why employers, landlords, insurance companies, and cellphone companies need to access
your credit record.
10. Build your credit score.
Stress that once you have a job, you will have a credit score. Build your credit record with small,
wise moves. Make small purchases (i.e.-gasoline) then pay it off IN FULL every month.
11. Budget buster. How much can you afford? The 20/10 rule.
Excluding mortgages, never borrow more than 20 percent of annual net pay. Monthly payments to
credit obligations should not exceed 10 percent of monthly net income.
12. Wrap up. $47,000 Savings.
Compare two people with different FICO scores who presumably borrow the same amount to buy a
car and the same amount to buy a house.
Show how the difference in credit scores will cost over $47,000 more if you have a low credit score
versus someone with a good credit score.
Show that the difference in monthly payments is $140.
Point out both people will have the car and house. One person will have an additional $140 per
month. Have students determine how that money could be spent and what additional “things” the
person with the better credit score will have. (vacation, retirement, education fund, etc.)
13. Announce a quiz for the next day covering credit reports and credit scores.
14. Additional time. May use the FICO score simulator link to look at ways to increase credit scores.
Assessment or Evaluation Worksheet: Credit Report Worksheet at Citi Cards website
Worksheet: Credit Score and Report notes videos
Quiz: Credit Report and Score Quiz (next class day)
Enrichment Review these websites:
Interpreting credit report codes http://www.ehow.com/how_5271146_read-credit-report-codes.html
Citi lesson—Credit http://www.citigroup.com/citi/financialeducation/curriculum/images/adult_7_aud.swf
Materials Credit Scores and Reports presentation
12 copies (or on class wiki): Credit Report Worksheet at Citi Cards website
12 copies (or on class wiki): Credit Score and Report notes videos
12 copies of Credit Report and Score Quiz
report.html (interactive credit report)
http://www.youtube.com/watch?v=wRV3OHpHcyo&feature=related (FICO score change)
http://www.youtube.com/watch?v=n1utKhlpUG8&feature=channel (How Raise My Credit Score)
http://www.youtube.com/watch?v=6shm2JO8msg&feature=related (850 Credit Score?)
http://www.youtube.com/watch?v=YzkBhfbwRkg&NR=1 (9 freecreditreport.com commercials)
http://www.myfico.com/HelpCenter/FICOScores/ (FICO scores)
www.practicalmoneyskills.com Teens Lesson 7
Computers: 12 (sign up for computer lab use)
Remote presentation slide advancer: 1
Other Resources: Whiteboard, markers, eraser
Credit Scores and Credit Report Credit Report and Credit Report and
Score notes videos.doc Score Quiz.doc
Reports 2007.pptx Worksheet at Citi Cards website.doc