11 Pages Posted: 30 Sep 2019
This case teaches students the importance of maintaining a strong FICO score by illustrating the consequences of paying bills late or not at all. The protagonist is David Molina, a waiter at a struggling Italian restaurant located down the block from where he lives. Money is tight for Molina right now—his limited income means he lives paycheck to paycheck. However, Molina knows things will be looking up for him soon because he recently accepted a job as a bank teller across town—his first desk job.Molina has been putting off paying two of his bills: a cable bill and his Bank of America credit card bill, both of which are late and have been issued, this time, in the form of threats to impact Molina's credit score if he doesn't pay them. He has just enough money to afford the minimum payments on each overdue bill. But then he receives a phone call from his friend, Jim Lindsey, reminding him about an invitation to go to Myrtle Beach for the upcoming weekend. Molina knows he cannot afford it, but a woman he's attracted to, Jessica, will be there too. Should Molina put off the bills yet again, and if so, how exactly will being late on them hurt his credit score?
Sept. 17, 2019
David Molina sighed and rubbed his forehead when he opened the last two bills in his mail pile—the ones he'd been hiding behind the latest Sports Illustrated issue on his desk. Money was always tight with Molina, given his inconsistent income as a waiter at the struggling Italian restaurant down the block. But he knew how to prioritize and drag out paying his bills for as long as possible. He wasn't proud of being late on some bills, but he did it out of necessity occasionally to make ends meet. The most important bills came first: his rent, electricity, water, gas, cell phone, and insurance bills were already paid this month. But these final two weren't normal monthly statements. Molina unfolded the late warnings from Time Warner Cable and his Bank of America Visa credit card, flattening them on his desk. They were more like threats than bills, Molina thought. He had never been this late on any payments before. Both letters claimed that if he didn't pay the required balance within a week, Molina's credit score would be impacted.
Molina fired up his computer and navigated to Bank of America's online banking website, where he entered the ID and password for his checking account. He winced as he saw the balance: $ 347. That was going to be tight. Enough to pay the minimums needed for both late payments, but just barely. Fortunately, this hand-to-mouth lifestyle was going to end: Molina had just gotten a job as a bank teller across town. This would be his first desk job and hopefully a step toward one day becoming a branch manager. He had it all mapped out. Musing about his future, Molina felt his cell phone vibrating in his pocket. His best friend, Jim Lindsey, was calling.
. . .
Keywords: Resilience Education, financial literacy, bills, FICO score, credit cards, collections, credit, credit history
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