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This lesson plan will teach high school students the basics of credit, including what a credit rating is, and what goes into the analysis that results in a credit rating. Students will also learn about small-business financial management through creating a model business, and having to determine how to take out a loan to expand the business. Students will use the concepts of good credit versus bad credit to understand that good credit is necessary for taking out a loan.

Time Allotment:
3 classes at 45 minutes per class

Subject Matter:
Math, Finance, Economics

Learning Objectives

Students will:
• Understand the concept of credit
• Understand the components of a credit score
• Understand the importance of having good credit
• Learn techniques for building a strong credit history
• Learn why new businesses need financing
• Research online sources for information about credit
Standards

1. National Council of Teachers and Mathematics
Principles and Standards for School Mathematics

Number and Operations
• Understand numbers, ways of representing numbers, relationships among numbers, and number systems;
• Understand meanings of operations and how they relate to one another;
• Compute fluently and make reasonable estimates.
Problem Solving
• Build new mathematical knowledge through problem solving;
• Solve problems that arise in mathematics and in other contexts;
• Apply and adapt a variety of appropriate strategies to solve problems;
• Monitor and reflect on the process of mathematical problem solving.
Connections
• Recognize and use connections among mathematical ideas;
• Understand how mathematical ideas interconnect and build on one another to produce a coherent whole;
• Recognize and apply mathematics in contexts outside of mathematics.
2. JumpStart Coalition for Personal Financial Literacy

Spending and Credit
Students will be able to:

1. Analyze the benefits and costs of consumer credit.
2. Compare sources of consumer credit.
3. Explain factors that affect creditworthiness and the purpose of credit records.
3. Mid-continent Research for Education and Learning (McREL)
Benchmarks for Economics

Standards
1. Understands that scarcity of productive resources requires choices that generate opportunity costs.

This lesson was prepared with the support of the Citigroup Foundation.

Written by: Melissa Donohue