Understanding FICO Scores

David Simmons is a part-time Uber driver trying to make ends meet as he pursues a career in finance. Money is tight for him right now because he just finished a 10-month program at one of the universities under the University of Hawaii umbrella, where he received his online associate's degree and focused on finance. He is optimistic that things will look up for him soon because he has made it to the final round of interviews for a financial associate position at a fast-casual food chain that has opened several stores in the surrounding area. But David is also late on two bills: his car payment and his student loan payment. He's been putting off both because other bills like rent and utilities seemed more important. He knows that if he works hard at getting lots of Uber rides over the coming weekend, he'll be able to pay both of the late bills, but then David's friend Jim reminds him about an upcoming fun trip to Lake Tahoe, and David isn't sure what to do. This case helps students learn about credit scores, also called FICO scores: what they are, who computes them, how they're determined, what they're used for, and, importantly, what happens when credit scores are negatively affected by late payments. It also explores credit-counseling and credit-repair services and how to think broadly about how credit affects one's whole life.