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I really enjoyed the recent conversation I had with Marla Blow who is not your typical credit card executive. She runs a start-up credit card company (FS Card, Inc.) focused on helping subprime customers get their “sea legs” to establish a positive credit history. In a sense, she has been preparing for this role for her entire career. You will hear about her odyssey from modeling losses in credit card portfolios during the Great Recession to signing on as an early team member at the Consumer Financial Protection Bureau (CFPB) and will learn how these experiences inform her work today. Enjoy!
Hat tip to Jessica for the heads-up on this resource (yes, the NGPF team does spend hundreds of hours looking for great resources!) Take this NerdWallet 14 question quiz and find out. Please note that there are some tricky questions here that will lead to valuable classroom discussions (I learned some new things):
NGPF Fellow Maureen Neuner is consistently in touch with us here at NGPF, which we love love love! Her most recent feedback seemed worth sharing, as it might entice some of you to check out our credit units for use next year. Here’s Maureen’s email [with comments from Jessica in brackets]…
Answer (from WSJ; subscription): 700 as of April, 2017
More from WSJ:
Credit scores for U.S. consumers reached a record high this spring while the share of Americans deemed to be some of the riskiest borrowers hit a record low—a potential boon for lending and economic activity.”
As for the reasons why credit scores continue to climb:
It’s so predictable. Whenever we are planning for a high school workshop, we will survey the students and/or the teachers to find out what topics they want to learn more about. Almost never do we see the words “credit scores” on that list. As the old saw goes, “teens don’t often know what they don’t know” and I would put credit scores firmly in that category of “not knowing” for them. Yet, we all know the importance of them getting off to a good start in this area.
A recent survey by NerdWallet finds widespread ignorance on the cost of a low credit score among adults. Before putting up this infographic, ask your students to list what the impact of having a low credit score is beyond the high interest on loans (if they can even borrow). Here’s an infographic that shows the common misconceptions:
An important skill for students to build is the ability to critically analyze any form of media (articles, videos, reader comments or even friends and family) that they rely upon for financial advice. Forums such as Bogleheads can be a useful place to find financial advice but still requires a critical eye to separate the signal from the noise.
I came across this question on Reddit (“Just turned 18, What is the best way to start building credit) that had a manageable number of responses. I thought this would be a good assessment to use after your Managing Credit unit. This question about building credit has become more important for young people given CARD Act regulations that make it difficult to get a credit card before the age of 21 unless you have a parent co-signer or an independent source of income.
Here’s the mini-activity. Ask your students to…
Update of an earlier post from January 2016 (we like to keep things current around here:)
Here’s where the data came from for this report:
In order to identify the cities with the highest and lowest credit scores, WalletHub’s analysts compared the average credit scores of residents in each of 2,534 U.S. cities as of October 2016, based on TransUnion data.
Click on a dot in the map near where you live to determine how your community’s credit score compares with the rest of the country:
- Tesla now worth more than Ford but their valuation depends on hitting aggressive sales targets for Model 3 (Economist)
But Tesla is going to have to crank production up by an awful lot more to make the 500,000 cars a year which Mr Musk wants to see pouring off the production line by 2018, let alone the 1m intended for just two years later. To reach those volumes, Tesla is counting on its forthcoming Model 3. Priced at around $35,000, the new car will cost around half that of the other two models. Due to begin production later this year, the Model 3 is supposed to take Tesla into the mass market, where it will face stiff competition from plug-in vehicles produced by existing mass manufacturers, including GM, Nissan and BMW.
- Can taking a financial education course reduce impulsive behavior? Research out of Utah State suggests the answer is yes! (WSJ with hat tip to Abnormal Returns):