Activity: Credit Report Investigation & Credit-Building Plan Setup: Learn to read a credit report and create a plan to build credit the right way. Materials Needed: • Sample credit report (or access annualcreditreport.com for a real one if 18+) • Credit Score Factor Chart (below) The 5 Factors of Your Credit Score: ┌────────────────────────┬────────┬────────────────────────────────────┐ │ Factor │ Weight │ What It Means │ ├────────────────────────┼────────┼────────────────────────────────────┤ │ Payment History │ 35% │ Do you pay on time? MOST IMPORTANT │ │ Amounts Owed │ 30% │ How much of your limit are you using│ │ Length of Credit History│ 15% │ How long have you had credit? │ │ Credit Mix │ 10% │ Different types (cards, loans) │ │ New Credit │ 10% │ How often do you apply for credit? │ └────────────────────────┴────────┴────────────────────────────────────┘ Step-by-Step Instructions: 1. Review the factors above. Which TWO are most important? (Payment History & Amounts Owed = 65% of your score!) 2. Analyze this scenario: Maria has a credit card with a $500 limit. She owes $400. What's her credit utilization? ($400 ÷ $500 = 80%) Is this good or bad? (Bad - should be under 30%) 3. Create YOUR credit-building plan (choose what applies): If you're under 18: □ Ask a parent to add you as an authorized user on their card □ Open a savings account to practice money management □ Learn about secured credit cards for when you turn 18 If you're 18+: □ Apply for a secured credit card ($200-500 deposit) □ Use it for ONE small purchase per month (like gas or streaming) □ Set up autopay to ALWAYS pay on time □ Keep utilization under 30% Real-World Example: Aaliyah became an authorized user on her mom's credit card at 17. She never even used the card, but her mom's good payment history helped Aaliyah start college with a 690 credit score - enough to get approved for a small student card on her own.

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