Warning: Only read this if you are in “goofing off” mode. You may also want to ignore this post (along with your FICO score of course) if you just got yelled at by your boss.
Everyone ignores their FICO scores anyway so why don’t you as well? Here are the reasons why I believe you should stop checking those reports and just relax, watch some TV and let the others do all the hard work.
- Out of Sight – You never really see it unless you ask for it, out of sight, out of mind.
- Promotes Use of Credit – I’m a cash person. No credit right here.
- Seldom Used – How many times do you ever need a loan anyway? Why bother when the score is only used a few times in your life?
- Not Always Used – Furthermore, not every company will use your FICO score to determine your credit risk. You can always try your luck and hope for the best.
- Wait for the Bubble – If you couldn’t get a loan approved, you can always just wait till the next credit bubble when everyone including the no-income retired folks were approved to buy million dollar homes with $0 down. Actually… I take the no-income part back. They have social security to pay for the loans.
- Just a Number – The thing is only three digits. Who cares? How much of a difference could it make?
- Scams – All you hear are scams associated with credit scores and reports. This can’t be important.
- I Live in a Vacuum – The FICO score is country specific, so whatever you do here means nothing in another country. In fact, only Canada and United States call it a FICO score.
- No Hope – I just got disapproved so whatever I do, it won’t make a difference anyway. I want a house NOW.
- The Thing is Jumpy – The score is a snapshot of information in your credit report so it fluctuates. Who has time keep track of something that’s ever-changing?
- Government Cares – Since the government pretty much screws up everything and they claim that credit scores are reliable, FICO scores must be useless.
- Temporary – Most negative credit information only stay on file for seven years. Even a bankruptcy is gone by the tenth year. I’m young. I have patience if any mistakes get on there…
- No Control – No one (except the people who actually make money off us with this) really knows exactly how it’s calculated, so if it can’t be manipulated, you can safely ignore it right?
- Against the Grain – Whenever everyone talks about something, it’s reason enough to ignore it. I’m special. I don’t need to think about what everyone else worries about.
- Still Reading? – By now, you should know how ridiculous it is to think that your FICO score doesn’t matter. Do you check your credit reports regularly? Are you on top of your credit score? If not, you are already ignoring your score.
Think again if you’ve been ignoring your FICO score… and congratulations. You must be in a happy mood if you got this far 🙂
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{ read the comments below or add one }
Thank you so much for this info. I finally figured out about a year ago that this credit score thing is a racket to keep people using credit and in debt. I bought my house 3 years ago and plan on living in it forever. Credit scores keep people wanting to buy on credit. I will now focus on building my net worth.
I’m sure the Wall Street investment bankers who stole or squandered billions and drove the U.S. economy into the ground probably had (and still have) excellent credit scores, but that does not reflect quality of character. Credit scores should not be used to determine eligibility for employment. There is no correlation between credit scores and job performance or the chances of defrauding an employer. None.
The greater problem is that we have “outsourced” our lending decisions to mysterious people behind the curtains who have developed a bizarre scoring system that few can understand. Can anyone tell me why my score should be lowered because I rent a car with a debit card (effectively paying cash) instead of a credit card?
I didn’t think so, yet the FICO folks (who have no particular statutory or legal authority) yield an inordinate amount of power over individuals who have no clear avenue of appeal or recourse.
Certainly we need ways to judge borrowers and then price risks appropriately into borrowing and lending costs, but the current system is unfair, farcical, and does far more damage than it prevents.
If you have a homeowners or auto insurance policy your rate will be determined by your credit score. Less than perfect credit=much higher insurance premiums.
I bought a new car a 2011 eight months ago. I put approximately one-third down and financed the rest at 3.9% APR. for 72 months. Recently while doing my on-line banking a window came up indicating new lower automobile financing rates plus a 0.25% additional reduction if one subscribed to auto pay. So I went to the banks web site and for refinancing a current year car was show an inertest rate of 2.4%. So the next day I went to a branch of the bank and applied for a loan. The bank agent indicated that one the information was filled out on the computer I would have a response back in a few minutes if I was approved and what the rate was. Almost immediately my credit score came back from Transunion . It showed that I had a 780+ credit score. The bank agent indicated that was an excellent score. After waiting over 20 minutes for a reply the bank agent said that I looked like it would take awhile and would call me the next day. That day passed and I called the banks agent on the third day. I was unable to get her she was out to lunch, then busy with a client. Finally another bank agent returned my call and said I was approved for the loan my rate was 3.4% and my payments would be $20.00 more per month than I have now. I know in the notes field the bank agent placed as reason for refinancing was to have a local bank to deal with and to reduce the monthly payments. Anyway I asked to speak with those making the decision and first spoke with the closer then with the underwriter who then had to speak with his supervisor. I asked them why I didn’t get the rate advertised and of course went through this mumbo jumbo about how there is a computer program that takes a bunch of factors into consideration. I asked why it took the computer three days to come up with a response. I asked am I being discriminated against due to my age and being on Social Security Disability. Didn’t a good credit score of 780+ mean anything? Essentially after all that was said and done the bank lowered my interest by an additional 0.25% which only lowered y payment by a dime. I told them they obviously manipulated the loan so they could say they offered me it but unattractive enough so they knew I would not take it. If I knew when banks advertise a low loan rate it is essentially a fraud I would not of wasted my time or the banks and at the same time impacting my credit score with the inquiry.
The sarcasm of this article is incredibly childish. The author has done all of his readers a huge disservice by writing it.
The truth is that unfair as the whole credit and credit rating systems are, we are all better off paying attention to the FICO score and trying to keep it as high as practical. We can’t wait for reform of the rotten system.
Knowing your credit score is not as important as knowing when and how to use credit. It really makes me sad to see all these little teenagers getting credit cards, racking up debt and then being in the hole till their mid thirties trying to pay back the debt they owe.
Credit can be a good thing, when used properly. Not all of us can buy a house outright, so if we want the stability of a home that we own, than a mortgage is really the only option. Credit is also great for EMERGENCY purposes–things that are unplanned.
I was an underwriter in the 90’s when Beacon and FICO scores were introduced, along with automated appraisals. The idea then was to make the approval process for smaller loans a little less painful, and of course, to reduce documentation with added turn around speed for funding home equity lines or after hours car loan approvals. It was later, at the turn of 2000, that the scores became a catch all for describing a profitable customer for lending, NOT a true picture of credit worthiness based on a willingness to pay. In fact, the system over the long haul has now been doctored to reward bad credit habits, punish good credit habits, and even enslave to some extent a population of “I must have it now”. I have a rather low score without having bad credit in direct spite of the system because I refuse to leave balances on credit cards for extended periods, I refuse to leave accounts open that I have no need for, and I refuse to take 72 months to pay for a car. In the 90’s I would have been considered someone with an A+ rating and could easily get a loan because it was obvious I would pay it back. In current times, I’m considered a B level borrower for having a score that is consistently between 620 and 670. Why? Because it’s not about your willingness to pay, it’s about your willingness to owe. Ignore your score and buy what you can afford people. Anything less is slavery to a system designed to keep you working for another person’s retirement and pleasure.
I have a realtor that told me that its easier to get a house with a bad credit rating than a bad rental history. I had clear credit till a 30k hospital bill did me in….I just paid a higher deposit and I got a great house. The Fico and banks have us by the cojones because they KNOW we are sold into this American dream. I don’t need to own….I don’t need the extra bills, I will never worry about being upside down. I get a different job? We move. Neighborhood goes to the dogs? We move. I have had my car insurance for over 9 years….so I have accident forgiveness and very low payments. I pay cash for my cars…its so much easier to save up 20k when you don’t have multiple payments sucking at your paycheck. You can live without credit…my husband makes 140k and his credit rating never stopped him from getting a job. It’s all about how much of a good lil technocrat your willing to be for the banks.
FICO was created by a company to make money and then they paid writers to hype it up and thus it became “important”! I you just be a good boy and buy only what you need and don’t over extend yourself- you will be ok. Stop playing into the game of having to have everything and the next big thing. Don’t follow the pack!
Just wondering what is the site to check your FICO on as I have been seriously paying down my debt and am considering buying a house when I get done with my deployment.
After banks raised our rates from an average of 7% to 25-30% we filed bankruptcy. I am totally debt free now, but it makes it difficult to run a business (you have to have good credit to ACCEPT credit cards) and we would have a very hard time renting if we wanted to move.
I figure with the money we save we will purchase a home outright in a cheap area and go from there.
In all I miss the credit score a lot less than the debt.
Maria, try and purchase a house when your FICO score is low… it won’t happen. Please don’t scare a FICO score is worthless. It may seem worthless to anyone who has a high FICO score- but to someone trying to come up from the prison of a low credit score- it can mean almost everything.
Mr. or Ms. Hmmm…
Interesting little tangent you went on there. So Democrats don’t borrow money? Especially politicians? They pay cash for everything? Watching your credit score and demonstrating responsibility is political? Speaking of a**es look in the mirror.
The material as I read it says to be responsible. One such as Mr. or Ms. Hmmm… may have enough wealth and never need to borrow money. Good for you. Some of us little people do on ocassion need to. I use my Credit Union as my primary financial institution. I guess that’s political too. What an elitest little fool you are Mr. or Ms. Hmmm… A useful idiot.
I’m riddled with $25K in credit card debt but always pay on time, always consistent, but now with a family crisis and my money tied up I’ve had it up to here with this facade of a financial system.
Bank got bailouts, auto companies got bailouts…the more you dont play by the rules the more banks are willing to help you. I stopped paying all my credit cards cold turkey. I am not defined by my credit score, I did not agree to your illegal 29% increase in my interest rate. Call and harass me all they want, I’m not paying a dime for your stupidity wall street.
It will drop off your credit record in 7 years then you will have a clean slate!
Recently I was notified that my credit limit on a credit card had been reduced by over 90% because of a dispute over a cell phone charge. The credit card has been paid and kept current for over eighteen years. Since I’m now retired I’m not even going to request a copy of the credit report since a good payment history doesn’t seem to make a difference to a creditor anyway.
I had applied for a job and learned that they hadnt hired me because of my credit score. The person they did hire had a very high one. Within 3mos time that person ended up stealing a large amount of money from the company.I have heard many stories along the same lines.I too have had false reporting on my credit score and yes i wrote to them. It changed nothing. And right now I am sure a lot of people have been struggling, I find it very interesting that we tell people to change their lives-whether it be from spending to crime yet what type of “break ” do we get?
and we wonder why people are depressed or go back to bad habits. There were supposed to be “watchdogs” on companies that did unfair practices- like calling all the time and threatening people- well THEY ALL STILL DO IT.
With a FICO score of over 800, my automobile insurance scored a healthy discount, and the line of credit loan against my home scored a full half point below prime – and that is good for the life of the loan.
An excellent FICO score does matter.
I’m sorry to tell you that you have not borrowed money below the Prime Rate. There is a difference between the APR and the rate you believe you’ve financed money at, and that difference will create a margin or profit. It’s how banking works. With a score that high, you are a very high profit margin for banks, meaning they make more money off of you than 95% of the rest of us. That’s the real meaning of a FICO score, how willing you are to remain in debt. Don’t believe me? Pay off your debt, and live without using your credit for one year. You will be shocked at how quickly you become a high 600’s statistic without any bad credit to show for it.
I do agree that your credit score is important–if you have the mindset and behaviors of a consumer. So, for most people keeping a high FICO score is essential.
However, I have to agree with the first comment by Mr. Tough Money Love. If you are in a business owner/investor mindset, your FICO score matters less than your financial statements. If the focus shifts from going into debt to purchase items to delayed gratification and a simplified lifestyle, then consumer credit becomes much less worrisome. The assets (businesses and investments) you have built generate sufficient income to bypass any FICO score to pay cash for your primary residence, car, vacations, etc.
Never could get a home loan because of credit report. After knowing right bank person a few years then recived my home loan. Just proves it’s who you know that counts. Last time I checked there was about 4 or 5 addresses where I never lived and just as many reports from never heard of persons or businesses. Then I found out that anyone can make reports to these so called credit report places.
Your an idiot if you care about that obsurd number. It is a tool for banks and credit card companies. I have cash so I dont need one. I have cash because I don’t have a FICO score.
Not that I feel strongly either way about this article right now, but thank you for reminding me to spell correctly when I’m calling someone an idiot.
I believe the credit card companies invented idenity theft. Then they invented fico scores. Then they invented idenity theft insurance protection. Then they invented fico score monitoring. Then they started making billions and billions of profits off us suckers. Dont depend on government to protect you. They are in bed with these people.
If we learn nothing else from the last five years we should learn that consumer credit including mortgages are a loser. it is a better deal for the consumer to rent. Home price appreciation was never real because it was based on a growing economy and appreciation ahead of inflation and neither exist anywhere in the western world nor are they likely in the lifetime of anyone able to read this article. You should ignore fico because if consumers move to a cash based economy prices will continue to crater and the entire system will fail. Everyone will be bankrupt in time and as happened in the depression houses will once more cost under $ 10,000 and mortgages will be given by the owner. Bye bye banker bonuses.
But the FICO score is no longer used just for -buying- a house. Renters now usually have to allow the prospective landlord to check their credit scores, too.
Now this is an example of abuse of the credit system, true. But reform is not going to happen overnight. In the meantime, even renters need a good FICO score, or the landlord will rent to someone else with a better score, falsely believing that he is less likely to give problems about paying the rent on time.
I don’t know if this article is supposed to be tongue-in-cheek or not – but: there ARE benefits to ignoring the FICO score. Doing so has helped me worry less and enjoy life more – and get out of debt; largely because noone will give me credit (at least until recently). That has turned out to be a blessing in disguise.
How could not not notice. Of course it is tongue in cheek. Completely so. And only rarely is ignoring it completely as you did a good idea. It seems to have worked out well for you, but it would be rash to expect it to work out so well for everyone. That is just not going to happen.
Well that’s some pretty witty banter and sarcasm there guy. I in fact do ignore my credit score, could care less what the big three to say about me since I pay cash for everything except my mortgage. Including cars.
If more people in America took REAL responsibility and paid for all their much “needed” material possessions in full at the time of purchase then the wonderful megabanks would dissolve and we could have a stable economy again. That’s right Neocon’s, I said the fee laden, suck America dry banks need to go for our economy to stabilize.
Let me guess Mr. Personal Finance blog genius, you’ve run the math and fall into the category of Republican Ass Clowns who tout the need for “more lending” as the way jobs will be created and the economy will get back on track. Ha. I’d laugh at you more but your ideology is too dangerous to be comical.
Watch out for your FICO score folks and put on the bank shackles, borrow some more money and struggle to pay it back. When the banks are collecting mass interest off everyone again utopia will reign upon us. Or, you could just trying living within your means instead of making sure bank profits increase annually to insure big bonuses on Wall Street and huge rewards for wealthy bank investors.
Your sarcastic little article was only partially correct in title. Everyone should ignore their FICO score, leave their “Republican” bank and join a Democratic credit union. Now there’s some “personal finance” advice that was worth the time to type.
Sorry guy, but the shackles are already on quite tight, whether you check the scores or not. Ignorance is NOT bliss here.
Agree with first comment, your credit score should matter very little, concentrate on spending less than you make. Materialism’s lust is short-lived, be happy with what you have, substance and covering, as you gain wisdom you will realize how silly it is to chase voids.
I love it.
Humor gets me everytime: I accepted your article to the Carnival of Economic Fun #2. It will appear on Wednesday, September 16th, alongside other fun economics articles.
Thanks for submitting.
I ignored my credit rating for the first 8 years of my ‘adult’ life. I’ve never once been refused credit. So you can ignore it to a degree without any incident… but I do now subscribe to keep an eye on it more for checking fraud than anything else.
Funny.
People need to focus more on this number– it impacts everything. Jobs, insurance, as well as credit.
Yes, it impacts all these things, but it should not. This is an example of how the credit system has been so thoroughly abused, turned into a Kafkaesque labyrinths of excuses for the rich to squeeze more money out of the less well off.
If President Obama is successful setting up his regulatory agency to protect financial consumers, their kind of chicanery, jacking up interest rates payments because of an unrelated late bill. will be illegal.
It should be illegal for companies to require credit reports for most job openings, but I don’t see that happening any time soon, even with the new agency. That reform will take longer.
MoneyNing, I read with interest your comments. I have a couple of my own, and a question. There are some of us out here who are not “ignoring” our debts, but have been hit by a devastating situation. In my case, a horrendous divorce, disabilities meaning I have limited income (Social Security and low alimony), and lawyer’s fees plus much more in problems caused me to have no option but to run up credit cards. I could not get the money anywhere else, no family to turn to, etc. Now, I owe about $20K (down from about $34K a year ago on a VERY limited income), and my FICO score is STILL in the high 700’s, though my ratio is not good. I made one late payment thinking my ex had paid it (he thought I did) and for several months, my FICO fell. I now no longer get offers of 0% intro rates, which I’d been using to shuffle debt around, nor can I get ANY credit cards because I got “too many” in the last year (I got TWO.). Also unfortunately, I’m about to lose my 0% interest-rate on one card in 2 months, another in 5 months (right now, all are 0%). Then, it’s really gonna hurt when I have to start paying interest. I didn’t carelessly use these cards, I had nowhere else to get money to live on, but I’m going to among those who will probably be paying off this debt for quite a while. Question: should I go with one of the debt “consolidators” who (at least by claim) get your credit owed cut “in half”? Or should I just carry on using every penny I can find to pay as much as possible on the 4 cards I owe money on? (I paid off 2 already, and one with a 27K credit limit cut my limit to 2K… Another I had not been using then lowered their limit from 10K to 1K. Why? I don’t know. As you might guess, I hate credit card companies, but I really didn’t have a choice.) Thanks if you have time to read and answer this.
Although I can’t guarantee that there’s some guy out there that will be able to cut your credit in half (if anything, he/she can always pay it off for you even though it’s unlikely), I’m very skeptical of any debt consolidation companies that promises to be able to do anything for you. As all your debts are concentrated in credit cards, I’m even more doubtful that anyone can negotiate their way out of paying less money for you. Interest maybe, but definitely not the amount you already owe. So as a general rule, I will not recommend a debt consolidation company, especially since they want to charge you for their service.
However, it doesn’t hurt to talk to them and IF they offer free consultation, you might want to see if you can get any ideas off of them. Just be careful that you won’t be on the hook for some type of charge and make it clear to them that you are here for a NO COMMITMENT type of free consultation (if they offer one).
Unfortunately, without any collateral, it will be hard to get another lower interest rate loan to cover these credit cards so the best thing is to be responsible and try to pay them off ASAP. There will be sacrifices, but it will be worth it when you pay off all your debt.
I’ve actually had very good luck with a debt settlement company called New Era Debt Solutions (or something very similar), based out of California. Using their service, I settled an AMEX card for about 35% of the amount owed, two Chase cards for about 50% of the amount owed, and a Citibank card for about 40% of the amount owed. My last card is another Citibank card, which the credit card company has offered a 67% settlement, which I think I will decline and wait until they sell it to collections, then have New Era negotiate with them.
I started off with around $30,000 in credit card debt, mostly due to a bad divorce. The process did involve a lot of waiting, not paying, and using caller ID to ignore many, many phone calls from the credit card companies and, later, collection agencies, but the amount I’ve saved is far more than the amount I’ve paid to the company for their services. It’s been well worth it to me. I can’t speak for any of the other companies offering similar services, but I’ve been happy with what New Era has done.
I should also point out that, for a while, I was carrying a good bit of debt on 0% interest cards like one of the other posters was, and that did all come crashing down. However, I was still getting those same preapproved 0% interest no-fee offers in spite of carrying all that debt.
At the same time, even with a credit score around 710-760 (depending on which of the three companies you looked at), I wasn’t able to get a refi done back in 2007 and 2008 because of my other peripheral numbers. A high credit score sounds nice, but it didn’t amount to a hill of beans, and when I was late on one credit card payment for one of my cards (AMEX I think it was) they immediately jacked my rate from 9.9% to 29.98%. Nice.
Any forgiven debt is considered cash money in your pocket by the IRS.
If you owe 10 thousand and settle for 3 thousand you owe income tax on 7 thousand.
Your FICO score is pointless, until it comes to getting a big fat mortgage. Then all hell breaks loose. Strive for 700+, or else you won’t get the best rates.
RB
I came up with the slogan, thus:
“The FICO® score is the new debtor’s prison.” © Maria Keller
I put a copyright on it, so if anyone sees this and wants to attribute it to them, you know you heard it here first.
There is no sense to have a good FICO® or any other type of credit score. When it comes to borrowing any kind of money, there is nothing a good credit score can do for you, when trying to refinance your house or negotiating a better rate based on your good history with credit cards and making all the payments on time. NOTHING.
Why should the credit card companies give someone with a good and long, on-time payment history a better interest rate? The only way they will agree to negotiate and either give you a lower monthly payment (so you can refinance) and/or a lower interest rate is if you stop paying them.
They bombard you with paperwork and threats, but guess what……about three weeks ago I stopped caring what my “excellent credit score” will do. Since I am going to have to go to an “all cash way of living,” I may as well stop paying them. They all want you to go to Consumer Credit Counseling, when in fact the credit card companies LOVE CCC and possibly are bankrolling them.
Notice how now the countdown of the CARD (cute acronym) legislation is bearing down and now they are jacking up everyone’s interest rates and cutting their credit lines and RENEGING ON THEIR AGREEMENTS that they made, in some cases as far back as 2004, for a low introductory rate for the life of the balance. If you want to keep your low introductory rate you have to close the account and give them written notice (which I suggest be sent certified mail…..because they can and do lie about it).
Of course when you cancel the card, you’re ruining your FICO (r) score yet again.
Sincerely,
Maria Keller
Yes, the “non-profit” consumer credit counseling agencies are all bankrolled by the credit industry. The “counselors” all “counsel” their “clients” (debtors) to keep on making payments for as long as possible. Their real clients are the owners of the debt. The debtors are just suckers.
I seriously can’t wait until I can ignore my FICO score again. I’ve been in the process of purchasing a house and the stress of keeping my FICO score up is killing me. One late payment or missed bill, and all of the sudden I could be dropping my score and risk higher interest rates or even being turned down for a loan if I needed to switch banks last minute or something.
I’ll be happy after this is over if I never need good credit again in my life.
Don’t ever say “never” 🙂 One day, you may want to refinance, or buy a bigger house.
On a separate note, shouldn’t you be keeping up with your bills anyway? The last thing you want is a late payment charge right?
Hey, thanks for the reply.
Yeah, one day I’ll need good credit again, to buy a car or a bigger house as you say, but it will just be nice when it’s not such an immediate issue on my mind.
And of course, I’ll always keep up with my bills, nobody wants a late fee, but the idea that simply missing a payment by a couple of days could cause my FICO score to drop and affect my ability to purchase a home for my family is too much to worry about on top of everything else.
We’re all humans who are bound to make mistakes, but who needs some mathematical equation to remind you of that?
It’s just some number that a corporation conceived of for the entire financial world to judge you by, and oh yeah, they’re getting rich off of it as well, go figure.
And unfortunately, in order to get a loan, we humans have to momentarily enter the mathematical matrix set forth by the FICO system we are stuck in.
I’m lucky, I have a good FICO score, but I can’t imagine those who are struggling to increase their score so that they can purchase a home or get other things that require good credit.
Anyway, maybe your article warning was meant for me, I’m probably taking this whole FICO thing too seriously.
Thanks again.
I’m sure you are fine. You should go to the homepage and read the article titled “I’m losing $50 to be happy and I’m not crazy”. Sometimes, it’s easier to just setup everything on automatic while leaving some interest on the table. You end up with less money (by a tiny bit) but much less stress.
FICO score, credit score, credit reports. Who cares? 🙂 Pretty funny post for a Friday afternoon.
I used to check my FICO score twice per day online and it’s nearly make me crazy, Ning. You’re right, as we should be relax and not to worry too much about the FICO score.
I don’t worry so much about my score. I have checked my reports. But, not as often as I should. If you pay cash for things (we don’t), you don’t have to worry about your scores. If you take care of your payments and pay debts off, you don’t have to worry about your score.
You only have to worry about your score when you aren’t and have a pattern of not meeting your obligations.
I must be really special. I’ve been ignoring my FICO score for my entire life. Don’t know what it is now or ever. Instead, I’ve been focusing on my net worth and building wealth. The credit score was designed to promote the use of credit and to make money for FICO. Who wants to be on that bandwagon?
BTW – your post does what a lot of folks do and commingles the concepts of credit reports and credit scores as if they were the same. They are not. I pay a lot of attention to my credit reports to monitor for ID theft. FICO score? Don’t care – my money habits will take care of that. Funny how not bowing at the feet of the credit industry seems to work out.
It’s true that credit reports aren’t the same as credit scores, but you might be surprised to hear that much of the credit decisions are based solely on the score. The point of the invention was to make these types of decisions faster and more automatic.
When you apply for credit and get an instant decision, those are all based on scores. Credit reports usually come into play after they already grouped you into tiers using credit scores, so while the score isn’t something you can control and therefore not something you can change directly, it’s an indicator that you are on the right track (if you are actively trying to improve your credit risk in order to get better loan terms)
I don’t dispute anything that you’ve stated about how robotic “credit analysts” make instant credit decisions using the FICO score. But that doesn’t make it right or even more valuable to consumers. Making credit decisions “faster and more automatic” is a strategy designed to capture impulse spenders and keep them in the buying mood until the credit decision is made. If true credit due diligence and underwriting were used (as in the days before the FICO score), many consumers would have time to reflect on and reconsider the borrow and spend decisions that the sellers are trying to expedite. That would be good for consumers but bad for the credit industry. Thus, FICO was born, inflicted upon us, and slowly expanded to become an indicator of our personal worth as a potential employee or tenant. Sorry – I’m not playing along.
Well said. I think we can all go on with how those evil companies have no morals. They are all in it for the profits.
The comments to this article are more interesting than the article itself. I agree that focusing on net worth is way more important than a FICO score. My life turned around after a Foreclosure a few years ago. I managed to pull through fine, at first renting a home and then eventually buying the home with owner financing. I avoided bankruptcy, and I have a good 3 more years before these marks leave my credit. In the meantime, I have learned to save money in a way I never did when I needed my credit.