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High School Students Learn About Financial Literacy

2013-10-15 18:09:02

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Seniors in Mrs. Hunold’s Free Enterprise classes at Yuma Catholic High School recently heard a financial presentation “worth a minimum of $100,000.”

“I’m going to tell you how you can save at least $100,000 by having good credit,” Mohave State Bank business development manager Jeff Byrd explained to a class Tuesday. “If you can prove me wrong, I’ll pay you $1,000 at the end of this class.”

To the dismay of the students, no one could prove him wrong.

In conjunction with the American Bankers Association’s annual “Get Smart About Credit Day,” Byrd spoke to classes about what their FICO or credit score consists of, how it is tracked, and how building up a good credit rate can help save them thousands of dollars later in life.

“Soaring college loan debt, the increase in online and mobile payment use and identity theft highlight the critical need for credit education,” said Byrd. “This program is an opportunity for our bank to plug into a national effort to equip students with ways to ensure a financially fit future and help our local community.”

Byrd gave an example to students of how one person could be faced with paying more on their mortgage for the same exact home that another person is paying less money for.

“If someone has a lower credit score, they’ll end up paying more for their house,” he said.
Students could also lose out on good-paying jobs based on their credit score.

Byrd said that if two people are up for the same job, and both are good candidates for the position based on their education, background and work experience; the final determiner could come down to the person’s finances. Also when students are looking at car insurance, homeowners insurance and health insurance; a bad credit score could cost them more in the long run if those areas aren’t addressed.

“Now, employers and insurance companies are using credit scores not necessarily to see if you are a credit risk, but to reveal your character and your lifestyle,” he commented. “Credit scores share when, where and how you utilize credit within your every day life. FICO scores are revealing, because if you lie about whether or not you pay your debts, then you are more than likely to lie about other facets of your life.”

In terms of students’ future jobs, Byrd added, “I want you guys to have every advantage that I didn’t have and be ready to deal in the real world. There’s a new economic game, and you guys need to learn how to play it. You’re competing against the world; you’re not just competing against other students from the United States.”

He shared how bad decisions with credit cards after high school “came back to haunt him” when he went to purchase his first car and found out that a credit card companies had a collection out on him. He said that he had to have his father co-sign on the loan with him and it was a “nightmare” to work his way out of his bad credit history.

“It really woke me up to how credit works,” said Byrd. He said that is the reason why he and other bankers across the country are wanting to spread the message to students early, so they don’t get trapped in the same financial struggles that some past generations faced when dealing with credit.

After listening to Byrd’s presentation, David Riek, 17, said that he didn’t realize how important building up good credit really is.

Riek said that he now understands the necessity of paying off charges on a credit card as soon as they are made.

Classmate Elizabeth Helley, 17, said that while she had an idea how much of an impact credit scores had on a person’s life after going through a summer Business Careers Awareness Program that addressed the topic, she didn’t realize just how much money a person could save in the long run if they have good credit.

Helley said because of this presentation she plans to make sure her bills are paid on time and she doesn’t live outside of her means.

Visit www.aba.com/engagement/pages/getsmartaboutcredit.aspx for more information about the ABA program.