Question

Credit Score Worksheet Your credit score is the overall grade that you have been given that tells a bank or credit union how you handle your money. Credit scores can range from 300 to 850. A good credit score is 700 or above. To make your credit score better, pay all of your bills on time. Do not 'max out' your credit card; try to keep it below 40% of the available credit limit. For example, if your credit limit is$100, don't have more than $40 charged at any one time. You are the banker. You need to decide whether or not to loan money to the following people. Your bank rules say that they should have less than 40% of their credit limit spent, and that their credit score must be above 620 to get a loan. If their credit score is over 700, they get the best interest rate (4%) but if it is low they get a higher interest rate (7%). A young couple wants to buy their first house. Their credit score is 650 and they have spent $800 of a $1,000 credit limit. Do you give them a loan? If yes, what rate are they getting? What do you tell them if they ask what they need to do to improve? 1. A retiree wants to buy a summer house. Their credit score is 700 and they have spent $797 of a 2. 53,000 credit limit. Do you give them a loan? If yes, what rate are they getting? What do you tel them if they ask what they need to do to improve? A teacher wants to buy a townhouse. Their credit score is 620 and they have spent $390 of a $1000 credit limit. Do you give them a loan? If yes, what rate are they getting? What do you tell them if 3. they ask what they need to do to improve? A manager wants to buy a condominium. Their credit score is 580 and they have spent $200 of a $500 credit limit. Do you give them a loan? If yes, what rate are they getting? What do you tell them if they ask what they need to do to improve? 4. Have students discuss these ideas and share their answers with the class.

Answer 1

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