In this weekly blog post, the Curriculum team will highlight Just One Resource from our NGPF collection that maybe doesn't get the attention it deserves. Use it this week or bookmark it for later.

[The Resource]  CALCULATE: Impact of Credit Scores on Loans

The Gist: This activity allows students to understand how a low, medium, and high credit score can impact the terms of future loans such as an auto loan, a mortgage, and more! 

The Best Parts:

• Students use the credit scores they calculated for Sam, Jessica, and Danielle in INTERACTIVE: FICO Credit Scores to determine how much a loan will cost each person in total. 
• Students will understand the advantages of having a high credit score and calculate the monetary difference between each person's total loan cost. 
• Students use an online FICO Loans Savings Calculator to calculate the total costs of both an auto loan and a mortgage for all three personas! 

Thank you to Robin Palmer for extending this activity with the following suggestions! 

• Besides your FICO score, does where you live affect the interest rates you would be charged?  Choose a specific FICO score range and change the state to see what happens.  Choose the state you live in plus four other states to compare. Record what you discovered.
• Go back to the FICO Credit Score Estimator. Write a scenario below about a fictitious person that includes details about the questions the estimator uses.  (Refer back to your INTERACTIVE: FICO Credit Scores worksheet.)  You can base this person off of what you believe your parents or a sibling or your teacher has done with his/her credit.  Then enter that information in the estimator and see what FICO score is calculated.    

As always, if you use this activity in your class, let us know how it goes by sending us an email or on social media! 

About the Author

Sonia Dalal

Sonia has always been passionate about instruction and improving students' learning experiences. She's come a long way since her days as a first grader, when she would "teach" music and read to her very attentive stuffed animals after school. Since then, she has taught students as a K-12 tutor, worked in several EdTech startups in the Bay Area, and completed her Ed.M in Education from the Harvard Graduate School of Education. She is passionate about bringing the high quality personal finance content and instruction she wished she'd received in school to the next generation of students and educators. When she isn't crafting lesson guides or working with teachers, Sonia loves to spend her time singing, being outdoors, and adventuring with family and friends!

More posts by Sonia