Hat tip to Jessica at NGPF for pointing out this recent John Oliver video (18:45 minutes) on the importance and serious deficiencies in our current credit evaluation process (think Credit Scores and Credit Reports). For those of you not familiar with John Oliver, well let’s just say, you will want to preview the video before deciding whether or not to use in your classroom. You will be the best judge of what portions might be most appropriate for your students.  

He does a good job of covering the basics of credit scores and credit reports while also leaving you with the feeling that if you weren’t laughing so hard, you might be crying or getting very angry about the recurring nature of the problems he highlights. Here are the basic facts he covers which you would find in most credit score/credit reports curriculum:

• The three C’s (character, capacity and capital) that were linchpins of the “old” credit evaluation system
• The importance of credit scores that go far beyond just lending decisions
• Names of the three credit reporting agencies (Equifax, Experian and TransUnion)
• Importance of checking your credit report and consequences of identity theft
• High error rates in credit reports
• Need for improvement in the dispute resolution process

I could see a few directions where you could take students after watching this video:

• Research what the most common errors on credit reports and rate them based on the harm they could cause
• Study the current dispute resolution process and communicate this information in easy to understand language (checklist, presentation, video, etc.)
• Compare the various research reports citing the number of errors in credit reports and why there might be differences in the error rates reported.
  • Here’s the FTC study
  • U.S. Public Interest Research Group (PIRG)
  • Here’s a third study: According to a recent industry study from Policy and Economic Research Council (PERC), consumers are materially affected by an inaccuracy less than one half of one percent of the time. Despite that statistic, we understand how stressful it can be to find incorrect information on your credit report, especially if the incorrect information is found while applying for credit. Our consumer assistance agents make it a priority to have disputes resolved as quickly and as easily as possible.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.