Credit scores now part of child’s play
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 one element has been missing: The children’s 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 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.