The Fair Isaac Corporation or FICO is talking about making changes to the way credit is scored. The changes will allow FICO to use things like your cable, cell phone and utility bills as sources for increasing the score, which in my opinion is long over due. But this is not just the only changes being proposed in the arena of consumer credit. Transunion, Equifax and Experian the credit bureaus are also considering making changes to their own reporting and disputing processes. Changes that would that would make it easier to dispute items on your credit, extending the reporting of non-paid medical bills to 6 months instead of 30 days. All of this makes me ask "Why did it take so long?" We all know how flawed the credit system is and how a lot things in our lives revolve around our FICO score, which has a ripple effect on both the ability to save and spend money. Look at this way if need a car loan, but are only allowed one with a high interest rate, it's going to cut into your budget. Meaning that $18,000 car financed at 17.9% for 5 years could in the end cost you $28,000. That's $166.66 a month and $2000 a year, money that could be placed in a savings/401K account or used to pay for other wants and needs. For the past 30 years our credit system has been used as an economic weapon, only allowing a few to gain from it. The system as it stands now allows almost any business to report negatively on you, but only a very small amount can report positively on your behalf. The fact that you have to incur a certain type of debt to gain credit is another off balanced problem, that neither FICO or the 3 credit bureaus are willing to tackle. At the end of the day if can't find a way to make the credit system better and balanced, then the gap between the haves and have nots will continue to widen.
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Great post ... But I must say that it's not the FICO system that has caused many in our community to pay higher interest it is more so the lack of understanding about credit and it's importance within our community. Could the reporting agencies do a better job YES .. and yet with that said millions are able to successfully navigate the "system" For all those reading this that may not understand the way your FICO scores are generated I suggest going to creditkarma.com it will allow you to see your approximate scores via "soft pulls" but more importantly it will show you how your scores are tallied ..... Credit card utilization (high impact) Payment history (high) Derogatory Marks (high) Age of credit history (medium) Total Accounts (low) ... I'm not going to say that credit is a "game" but just like when playing a game understanding the rules and formulating strategies make it more likely you will "win" - Start with a secured credit card from your bank never allow the balance to get higher than 30 % of your limit pay off your entire balance each month if at all possible - never pay late .. in 3 - 6 months you will be able to successfully apply for a non secured credit card aI would suggest the Capitol one platinum card your limit will most likely be 300 dollars but they will increase your limit after 5 months of on time payments again never allow your balance to exceed 30 % of the cards limit ALWAYS pay before the due date and if possible zero out the card each month. By following these simple steps your credit will rise into the 700's within 2 years ( BE CAREFUL THOUGH ONCE YOU BEGIN TO UNDERSTAND AND DEVELOP YOUR CREDIT YOU'LL FIND YOUR SELF CHECKING YOUR SCORES DAILY ) Again great post I look forward to your next topic
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