Introduction to Credit Bureau for Kids and Teens
This video explains the concept of a Credit Bureau in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about Credit Bureaus, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
- What is a credit bureau
- What kind of information do credit bureaus have about you
- Where do credit bureaus get this information from
- Why are credit bureaus important
What is a credit bureau?
A credit bureau, also known as a credit reporting agency, is a company that collects information about peoples’ financial transactions, which is then used to create their credit reports and credit scores.
They sell these credit reports and scores to potential lenders like banks, mortgage providers and credit card companies to help them make lending decisions based on an individual’s creditworthiness.
Potential employers, landlords, insurance companies etc., also use the credit reports and credit scores to evaluate the creditworthiness of an individual before entering into a financial contract with them.
The three major credit bureaus are Equifax, Experian, and TransUnion.
What kind of information do credit bureaus have about me?
They have your personal details like name, date of birth, Social Security Number (SSN), past and current addresses, employment history, etc.
They collect information on your current and past loans and credit accounts, payment history – including late and missed payments, credit utilization, length of credit history, bankruptcies, etc.
Credit bureaus also keep a record of all inquiries made about your credit – for example, by a bank when you apply for a loan.
Where do credit bureaus get this information from?
Most lenders provide information about your borrowing behavior to one or more of these credit bureaus. So banks, credit card companies and mortgage lenders would be the primary source of information.
Utilities and phone companies can also provide information around your bill payments. Some information – like bankruptcies – comes from public records.
Depending on the number of sources who have reported your information to each bureau, your credit report and credit score may vary slightly across these 3 bureaus.
Why are credit bureaus important?
Credit bureaus play a very vital role in your financial life.
While they do not directly decide whether you can get a loan or the terms of the loan, they heavily influence the decision made by lenders through their credit reports and credit scores.
So whether you are going for something big like a mortgage, or simply applying for a new credit card, unless you have a good credit score it can be very difficult or very expensive to get it.
Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids & Teens
Podcast: What is a Credit Bureau
Fun, informative and concise episodes by a 10-year old, breaking down complex financial concepts in a way that kids and beginners can understand. Episodes cover personal finance topics like saving, investing, banking, credit cards, insurance, real estate, mortgage, retirement planning, 401k, stocks, bonds, income tax, and more, and are in the form of a conversation between a cowboy (a finance novice) and his friend, a stock broker. Making finance your friend, only at Easy Peasy Finance.
A little bit about me: I have been fascinated with the world of personal finance since I was 6! I love to read personal finance books, and keep myself updated on the latest by reading various personal finance magazines. My friends often ask me questions about finance because they find it complex and intimidating. That’s what inspired me to start my YouTube channel called Easy Peasy Finance when I was 8, and this podcast 2 years later.
Everything you need to know about a Credit Bureau: What is a credit bureau, What kind of information do credit bureaus have about you, Where do credit bureaus get the information from, Why are credit bureaus important, and more. Show notes and transcript at: What is a Credit Bureau? A Simple Explanation for Kids, Teens …