FICO Debunked
Credit scores and credit bureaus and FICO look like a three-headed monster living under your bed. Pull back the covers and see if you even care what your FICO score is this month.
So why are we (the average consumer) brainwashed into taking on debt and maintaining credit cards to keep our FICO scores high?
Shopaholics have been schooled to buy first, and pay later. Or maybe even hide the credit card statements. Out of sight, free to shop.
A high FICO/credit score can only guide you down the path to crushing debt. Living beyond your means is the American Way. Here are 5 reasons to take a different approach and to tear up your credit report:
1. Your FICO Does Not Cover the Nut.
If you have income to cover your bills, what do you need credit for. If you don't have enough money to buy gas, to pay for groceries, or to handle life's expenses, you have much bigger problems than a fluctuating number determined by a computer algorithm.
2. Out of Your Control.
No matter how many credit repair books you read, it is hard to raise your score except by paying your bills on time. And even then, which bills you pay can have more to do with your score than how much you pay.
Not all bills are created equal. The credit score might improve if you pay certain bills on time, such as a POTS line phone (Plain Old Telephone Service - it's a real term), mortgage, gas, electric, and other utilities. But let your debt-to-credit ratio get too high on your credit cards and you can get slammed no matter how current your payments are.
3. Inaccurate.
Credit scores are dry mathematical formulas. No real human contact. Mistakes can live forever. Most human activities can only lower your score.
Your income does not raise or lower your score. How can that be? Remember, your credit score only cares about your payment history and debt-to-credit ratio. Nothing more.
4. Too Much Debt.
All a high credit score can do is tempt you into taking on too much debt. For the person who lives debt-free within their means, a FICO score is worthless.
Use your credit card, carry a balance, and pay on time, and the banks will increase your limits and give you countless opportunities to take on more debt.
Lose your job, suffer an illness, or don't pay on time, and you will wonder how the word easy was ever attached to credit.
5. Can't Take Credit Score With You.
Death and taxes are inevitable. You can't successfully avoid either. On the other hand, your credit score is left at the graveside.
Concentrate on living a wealthy life no matter what your income is.
Eat well. Get a full night's sleep. Make love to your wife.
Live happily within your means.
Don't lose a moment of your life to worry about a mathematical score your cannot control.
So why are we (the average consumer) brainwashed into taking on debt and maintaining credit cards to keep our FICO scores high?
Shopaholics have been schooled to buy first, and pay later. Or maybe even hide the credit card statements. Out of sight, free to shop.
A high FICO/credit score can only guide you down the path to crushing debt. Living beyond your means is the American Way. Here are 5 reasons to take a different approach and to tear up your credit report:
1. Your FICO Does Not Cover the Nut.
If you have income to cover your bills, what do you need credit for. If you don't have enough money to buy gas, to pay for groceries, or to handle life's expenses, you have much bigger problems than a fluctuating number determined by a computer algorithm.
2. Out of Your Control.
No matter how many credit repair books you read, it is hard to raise your score except by paying your bills on time. And even then, which bills you pay can have more to do with your score than how much you pay.
Not all bills are created equal. The credit score might improve if you pay certain bills on time, such as a POTS line phone (Plain Old Telephone Service - it's a real term), mortgage, gas, electric, and other utilities. But let your debt-to-credit ratio get too high on your credit cards and you can get slammed no matter how current your payments are.
3. Inaccurate.
Credit scores are dry mathematical formulas. No real human contact. Mistakes can live forever. Most human activities can only lower your score.
Your income does not raise or lower your score. How can that be? Remember, your credit score only cares about your payment history and debt-to-credit ratio. Nothing more.
4. Too Much Debt.
All a high credit score can do is tempt you into taking on too much debt. For the person who lives debt-free within their means, a FICO score is worthless.
Use your credit card, carry a balance, and pay on time, and the banks will increase your limits and give you countless opportunities to take on more debt.
Lose your job, suffer an illness, or don't pay on time, and you will wonder how the word easy was ever attached to credit.
5. Can't Take Credit Score With You.
Death and taxes are inevitable. You can't successfully avoid either. On the other hand, your credit score is left at the graveside.
Concentrate on living a wealthy life no matter what your income is.
Eat well. Get a full night's sleep. Make love to your wife.
Live happily within your means.
Don't lose a moment of your life to worry about a mathematical score your cannot control.
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posted by SolveItQuick at
1:55 PM
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