Activity: Let’s Make A (Credit Card) Loan!

One teaching strategy that I have used in the classroom to teach students about the importance of credit scores and credit reports is to create an activity where they act as credit underwriter.  In this role, they have three levers that they can play with in reviewing three applications:  approve/decline the application, set borrowing limits and set interest rates.  By giving them three levers, they see how lenders can control or mitigate risk on the less creditworthy applications.   Students are also asked to provide a rationale for their decisions.

This activity provides an excellent way to extend your lesson on credit cards and credit scores, demonstrates the importance of a good credit history and provides students with a new perspective on how credit decisions are made.