Credit: Past, Present & Future

By Sherry Hertle & Teresa Caldwell

Module 1 :Credit ManagementModule 2:Improving Your Credit Score

Abstract

In today's day and age more and more people are having problems managing their credit wisely. 

No formal education on credit is required in high school or college and often people learn about credit through the school of hard knock or just breeze by with a good credit score by chance.

This instructional product will provide learners with the basic knowledge, resources and steps to understanding and managing their credit for financial success. 

Learners

People who want to either improve their credit, learn more about how credit works

• These learners may be self-selected or may be directed to this course through loan officers, case workers or secondary and post secondary schools.

DemographicsEducation (varies experience- high school graduates, some college, BA)

Age (25 -35)Income (35,000 – 65,000)

Computer Experience (Moderate – Experienced)

Context

The class will be delivered virtually and offered through the adult learning annex.

Class size will range from 3-15

Meetings will consist three two hour workshops

( of which we are only developing 2 workshops)

Instruction would require at minimum:

Computer with Internet access configured to access VC

Completed pre-work

Microphone

Camera or picture for facilitator

Designing Activities Virtually

Step 1

Identify the type of interaction that will be involved

Step 2

Know what types of tools are available

Step 3

Match tools to the interaction

3 Modules: 6 Hour Course

Module 1 (7 Lessons) History of Credit Sources of Credit How Lenders Evaluate Credit Understanding Your FICO Tips For Raising Your Score Create a Financial Plan Start a Budget

Module 2 ( 5 Lessons)Credit BureausHow to select a credit repair serviceRepairing your creditWriting a Dispute LetterHow to Select the Right Credit Card

Module 3 (3 Lessons)Bankruptcies, Liens and JudgmentsSchool LoansMedical Bills

Course Design

All Modules are Instructor Led & May Include the Following Activities

Instruction Lead: Virtual Classroom

Class Discussion: Live In Class Chat

Small Group Activities :

1. Credit Management

2. Improving Your Credit

3.Medical and Education Bills

Content Related Research 1

People do not understand how low credit scores can increase their mortgage and credit interest rates.

Low credit scores resulted in interest rate between 19% to 26% for new car 70 percentage of employers check credit rating for potential employees 48% of consumers know that poor credit score can result in rejected application 40% of American know that slow credit indications result in a $500 deposit for

utilities

Chartered Financial Analyst and Julie Sturgeonhttp://www.bankrate.com/msn/news/debt/debtmanageguide/bad-hurts1.asp?prodtype=pfin#2

Content Related Research 2

A BizRate article stated

Nearly every consumer has at least on error on the report. Credit bureaus do not check the accuracy of items given by creditors.

Check for typing errors, outdated information and inaccurate account histories. Not resolving this inaccuracies results in additional expense to the customer via of higher interest rates, or deposits from creditors.

• www.bankrate.com/msn/news/debt/debtmanageguide/fix-mistakes1.asp?caret=3c

Time AllocationModule 1 7 lessons 2 hours

Lesson Lecture Activity Media Time

History of Credit

Sources of Credit

How lenders evaluate Credit

Understanding your FICO

Tips for Raising Your Score

Create Financial Plan

Start a Budget

Deliverables PowerPoint Presentation

Instructor Guide

Participant Guide/ Workbook

Course Evaluation

Pre Work‐

Pre and Post Test

Post Work‐

Guiding Design Philosophies

Merrill’s Component Display TheoryGagne’s Nine Events of InstructionKeller's ARCs Motivational Theory

Component Display Theory (CDT)Lesson ObjectiveHistory of Credit Identify two events that impact the debt and credit system as we know it

today

Source of Credit List two sources of credit and the benefit and drawback of each

How Lenders Evaluate Credit

Differentiate between the factors that impact your credit score and the factors that do not impact your credit score

Understanding Your FICO List the five factors that affect your credit score in the order of weighted importance

Tips for Raising Your Score

Establish a list of activities to adhere to that will increase your credit score

Create a Financial Plan Identify long and short term financial goals Establish timelines for achieving financial goals

Start a Budget Create a budget to help reduce debt and accommodate for both long and short term financial goals Identify internet resources and/or communities for money management tracking and tips

13

Gagne’s 9 Events of InstructionLesson: Starting a Budget

Event Action

Gain Attention Humorous Video

Describe goal The learner will be able to create a budget to help reduce debt and accommodate for both long and short term financial goals

Stimulate Recall of Prior Knowledge Have students recall prior experiences with budgeting. What worked and what did not.

Present material to be learned Online tutorial on budgeting and money management presented. Worksheet designed to chunk tasks to avoid overload.

Provide guidance for Learning

Elicit performance "practice" Complete case study using the budget worksheet

Provide Informative Feedback Submit to instructor for feedback

Assess Performance Utilizing financial statements participants complete the budget worksheet and submit to instructor for assessment

Enhance retention and transfer Join Wesabe or another credit management community. Email class members on one useful tidbit that you located on a community board

14

• Gain the Gain the AAttention of the learnersttention of the learners: This is done with interactive introduction : This is done with interactive introduction

exercises and humorous videosexercises and humorous videos

• Attach Attach RelevanceRelevance between the lesson and the goals of the learners: between the lesson and the goals of the learners: This is This is

done by explaining some of the worthwhile reasons to attain good creditdone by explaining some of the worthwhile reasons to attain good credit

• Instill Instill CConfidence in the learners:onfidence in the learners: This is achieved by organizing the lesson in This is achieved by organizing the lesson in

chunks rather than dumping the information at once.chunks rather than dumping the information at once.

• Give the learners Give the learners SSatisfaction:atisfaction: Participants leave the class with their Participants leave the class with their

financial data recorded, analyzed and a budget in place, making the process financial data recorded, analyzed and a budget in place, making the process

of managing their credit less intimidating. of managing their credit less intimidating.

ARCS

Introduction ExerciseMind Mapping: Used to gather or organize thoughts when discussing

concepts or establishing prior knowledge

Activity:

1. Refer participants to workbook.

2. Instruct participants to write inside the large circle, the main

topic of

discussion (credit management)

3.Instruct participants to brainstorm topics or offshoots of the

main idea and write them inside the smaller surrounding circle

4.Two – three volunteers share their thoughts

Structured Writing Solutions

Information Mapping

Analysis

Organization

Presentation.

Procedures—stepsProcess description—explanationsStructure—descriptionsConcepts—definitions and examplesPrinciples—rulesFacts—physical characteristicsClassification—types and categories

Presenting Facts

Diagrams for Concrete Facts Clark suggests that in order to Reduce cognitive load, use adiagram integrating descriptive text into a diagram.

How Lenders Evaluate Credit ( Ranges of Scores)

Tables and Lists for Specific Data Specific Data can be presented in tables or bullet lists.  

FACTS need to be displayed effectively to help learners understanding according to Clark (1999).

How Lenders Evaluate Credit (Credit Score)( Tips for Raising Score)

FICO weighted contribution

Pre and Post TestMyth or Fact True False

1. The law limits information from staying longer than 7 years maximum on your credit report and cannot be delete whenever they see fit?

2. Given the time, energy and commitment you can learn to do most of what an attorney or credit agency could do on your behalf?

3. Having one negative item on your credit does not affect your credit score?

4. The credit bureau will remove items off your credit if you include all items in one letter?

5. To ope n a high risk credit card has no negative affect on your credit?

6. If you name is written wrong on your credit report it is okay, because creditors do not look at this when determining to grant you credit?

7. When making payments on a 0% interest credit card, the creditor grants you one time to be late without any affect on your interest rate?

8. Liens and judgments cannot be removed from your credit report?

9. Yo ur credit score only affects your ability to get credit?

10. If there is a discrepancy on your credit report, it can be removed if you write a dispute letter with all necessary information included for removal?

Pre and Post Test

Formative Evaluation Questions

1. Does the proposed design meet the needs of the target learners?

2. Is the content presented in an organized, coherent manner?

3. Do the video examples provide value and enhance the learning experience?

4. Are there adequate activities to reinforce the learning?

5. Are the necessary tools and resources provided to complete activities and

exercises?

6. Will the learners be motivated to do use the provided job aids and apply these

learning principles to help their future financial success?

Sources Clark, Ruth C. 2007. Developing technical training, a structured

approach for developing classroom and computer based instructional materials 3rd ed. San Francisco, CA: Pfeiffer.

Fink, Diana, (2006). Chunks: Superior memory of experts. In B. Hoffman (Ed.), Encyclopedia of Educational Technology. Retrieved August 3, 2008, from http://coe.sdsu.edu/eet/articles/chunks/start.htm

Roberts, S. (2005). Choosing tools for real-time virtual meetings. In B. Hoffman (Ed.), Encyclopedia of Educational Technology. Retrieved August 3, 2008, from http://coe.sdsu.edu/eet/articles/sitools/start.htm

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