Credit Scoring Education

Credit Scoring Education Non-Existent

Lack of credit scoring education is a glaring deficiency in the United States educational system.  I get numerous requests from teachers at the Middle School, High School and College levels to lecture on the subject of credit scoring education.  How does an individual start a credit score from nothing?  How does a person without a credit file become a person with a credit file if you need credit to get credit?  Good questions for a young person to ask.  “Why don’t they teach credit scoring education?  That is what we really need and can use.”  I hear this question from students over and over.

There are ways and means to become a person with a solid credit file foundation to build upon.  But these ways and means need to be taught.  Understanding credit scoring education and its rules goes a long way to getting the necessary good start for a young person in the world of personal finance.  This good starting  credit score will grow into an excellent credit score with the right guidance and attention to detail.  It’s a question of teaching the fundamentals by breaking down the credit scoring system into its 5 component parts.  Each component part is understandable as a unit.  Then we can demonstrate how these parts work together to form a credit score based on many individual data points.  These factors are:

  1. Payment History…………35 percent of score
  2. Debt to Credit ratio……..30 percent of score
  3. Age of Credit History…..15 percent of score
  4. Types of Credit…………..10 percent of score
  5. New Inquiries   ………….10 percent of score

Effective Credit Scoring Education Requires Time

An hour long lecture on the subject of effective credit scoring education is a guaranteed exercise in frustration.  An hour or 90 minutes is not enough time to even scratch the surface of the complexities of the credit scoring education world.  The student’s questions come at the educator fast and furious.  There is something exhilarating about a room full of students eager to learn.   Visions of sugar plums have been replaced by visions of new cars, phones, apartments and clothes.  The teacher’s responsibility weighs heavily.   Teachers must be thorough enough to make beginning credit scoring education worth while.  The question and answer period after a single class could go on seemingly forever if time permitted.  Unfortunately for all, a one class credit scoring education experience invariably leaves the students with just enough knowledge to know that they need a lot more.  Even worse: “A little learning is a dangerous thing”.  Thinking you know more than you really do about a complex subject like credit scoring education can lead to trouble.

A Semester of Credit Scoring Education is Necessary

Any credit scoring education worthy of consideration needs to last at least a semester.  How the FICO credit scoring system measures consumer behavior is a complex and interesting subject.  The FICO credit scoring system is counter-intuitive in many ways.  What beginning student will understand why the salary they make does not enter into the computation of their FICO score?  Why does a single missed payment hurt their score so much?  How can young people be helped by becoming an authorized user on the credit card of a responsible person?  All of these questions have answers.  All of these answers generate new questions of their own.

Credit Scoring Education Materials Available Free

In an effort to promulgate credit scoring education I have a policy of offering free access to the 240 Essays  I have written on credit scoring education related topics.  My ebook “On Home Buying and Credit Repair” is free to qualified teachers of credit scoring education.  Paperbacks of that same book will be shipped in bulk at cost for use in teaching.  Any one who needs help with teaching materials can contact me for help. I will provide unfettered access to the resources needed to teach a meaningful course.  I will aid in shaping these materials into a cohesive lesson plan.  Join with me in this movement to bring credit scoring education to young people.  A good start in credit scoring education can mean a lifetime of benefits for the student.


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