TBL May 2024 - 10

It's never too early to get
smart about credit
By Keon Haley
s young business leaders, FBLA members
are already on the fast track to setting
themselves up for a knowledgeable financial
future. But across the country, 88 percent of U.S.
adults say high school did not leave them " fully
prepared " for how to handle money in the real
world. And one critical but often overlooked area of
financial education is learning how to manage credit.
Credit education is a fundamental part of
preparing students for their financial future. While
it is never too late to learn, starting early is critical
to setting yourself up for success. Understanding
how credit works can be the key to better financial
outcomes throughout your life, from getting your
first credit card to buying a house and even starting
your own business.
A credit
score is a
number that
tells lenders
banks) how
likely you
are to pay
back a loan
based on
your credit
Before highlighting the full benefits of credit
education, let's take a step back and answer the #1
question students have when they learn about credit: What is a
credit score?
A credit score is a three-digit number that tells lenders
(often banks) how likely you are to pay back a loan based on
your credit history. It is calculated using the information in
your credit file, which is kept by the three large credit bureaus.
As the industry standard for credit scores, the FICO®
Score is
used by more than 90 percent of top lenders.
When you are ready to buy your
first home, lenders will look at
your credit report and your
credit score to determine
your ability to pay back
a mortgage. Typically,
the better your
credit score, the
more favorable
the terms and
interest rates
on loans will
be, which can
translate to
thousands of
dollars in
savings in
the future.
This is true for almost every financial product
you will utilize on your credit journey. Landlords
often check your credit report before you move in to
an apartment, and credit card issuers will set your
credit limit and interest rates based on your score.
And notably for FBLA members, if you're hoping to
start a business, your credit score may determine
whether you can take out a loan to get your idea off
the ground.
Learning about credit will set you up for success
in your financial future. At FICO®
a free student-friendly curriculum, Score A Better
, we have developed
Fundamentals, designed specifically to help
students of all ages learn about the intricacies of
credit scores and credit reports, provide strategies to
manage your credit over time, and equip you with the
necessary tools for a healthy financial future - and
have some fun while doing it!
If you're a student getting ready to embark on your
credit journey, or an educator looking to support others
in their financial education, Score A Better Future™
Fundamentals is designed to give you the toolkit you
need to succeed - now and in the future.
Keon Haley is the Program Director for FICO®
Score A Better Future™
(SABF). As a certified
Project Manager and Scrum Master,
Haley leads SABF in its efforts
to help consumers and
entrepreneurs gain access
to the credit they need
through education
and access to nonprofit
counseling. He
earned his Bachelor
of Business
in economics and
finance at Radford
and resides
in Charlotte,
North Carolina.
https://www.fico.com/sabf/fundamentals https://www.fico.com/sabf/fundamentals

TBL May 2024

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