Just One Resource - CALCULATE: Impact of Credit Score on Loans
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!
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