Credit scores be­come child’s play

Nelson Mail - - BUSINESS - ROB STOCK

For the first time school chil­dren are go­ing to be credit scored, but it’s not be­cause lenders are seek­ing younger bor­row­ers.

It’s all in the name of ed­u­ca­tion, with credit re­port­ing bu­reau Equifax hav­ing be­come a spon­sor of Ban­qer, an on­line sys­tem be­ing used by 700 classes in schools around New Zealand.

Ban­qer was founded by Ken­dall Flutey in a bid to use ‘‘gam­i­fi­ca­tion’’ to de­liver fi­nan­cial lessons in a way that doesn’t cause young­sters’ eyes to glaze over.

It pro­vides a vir­tual world in which chil­dren, over­seen by their teach­ers, can earn, bor­row, and buy as­sets such as homes to help them learn how adults build wealth, and some­times lose it.

But there’s been one el­e­ment miss­ing. The chil­dren’s money suc­cesses and blun­ders haven’t re­sulted in them be­ing credit scored.

Yes­ter­day that changed. In a launch at Mur­ray’s Bay In­ter­me­di­ate School in Auck­land, Ban­qer and Equifax re­leased the game up­grade that will see chil­dren us­ing Ban­qer learn about credit scores and credit re­port­ing.

Adults in the real world are given credit scores from zero and 1000 depend­ing on how well they man­age their money lives, with their banks, power com­pa­nies and in­sur­ers all feed­ing in­for­ma­tion to credit re­port­ing bu­reaus such as Equifax and Dun & Brad­street.

Now, chil­dren us­ing Ban­qer will find the same hap­pen­ing to them, with their scores go­ing to zero if their fi­nan­cial gam­ing ends in vir­tual bank­ruptcy.

‘‘Learn­ing about credit re­ports, credit scores, credit wor­thi­ness and al­low­ing stu­dents to see the real-life im­pli­ca­tions of their fi­nan­cial de­ci­sions is es­sen­tial if we want to build a more fi­nan­cially lit­er­ate na­tion,’’ said Carol Chris, Equifax’s New Zealand man­ag­ing di­rec­tor.

Some of the learn­ing may even rub off on the chil­dren’s par­ents.

‘‘We know that Ban­qer’s ex­ist­ing learn­ing plat­form is very pop­u­lar among schools and that Kiwi kids en­joy the sim­u­lated learn­ing en­vi­ron­ment. As a re­sult, stu­dents are now shar­ing their knowl­edge with peers and fam­ily.’’

As with adults’ real-world credit scores, the chil­dren’s will be cal­cu­lated depend­ing on both pos­i­tive be­hav­iours such as mak­ing timely re­pay­ments, and neg­a­tive ones, such as miss­ing a bill pay­ment.

And as with adults, each of the chil­dren will be able to check their credit re­port.

‘‘The re­port also sug­gests ways in which a stu­dent can work to im­prove their credit score, along with the ra­tio­nale [for] why,’’ Chris said.

Ban­qer, founded by Ken­dall Flutey, helps chil­dren learn how adults build wealth and how they some­times lose it.

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