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.
I often wonder why the average American worries so much about their credit. Why do you even care? A high FICO score can only lead to the possibility of high debt.
Shopaholics have been schooled to buy first, and pay later. Or maybe even hide the credit card statements. Out of sight, free to shop.
5 reasons why your FICO score is a false idol:
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. No Control.
Trying to raise your credit score, as the countless credit repair books will teach you, is a thankless task. At any time, the credit bureaus can alter their algorithms and change their emphasis to change your score – all beyond your control.
For instance, not all bills are created equal. Pay your standard landline phone bill – FICO good. Pay your cell phone bill (often much higher) – FICO doesn’t care. Don’t pay any bill that gets reported to the credit bureaus and you get slammed. No one said FICO was fair, no matter what the name of the company is.
3. Inaccurate.
Credit bureaus are not human, but boy can they make mistakes. And usually not in your favor.
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. Excessive 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.
Easy and credit should never come together in a sentence. How many products have you bought that you did not need just because financing was available.
5. No Legacy.
When your eulogy is read at your funeral, trust me, your FICO score will not be mentioned.
Concentrate on living a wealthy life no matter what your income is.
Eat, drink, and be merry, just not on someone else’s dime.
Live fully on the income you make. Upgrade your toys when you have the cash, not the credit.
If your credit rating is shot, bury it. You will sleep better at night.
Our site – Burn Down the Freaking Mission – offers additional information on destroying debt, recovering your privacy, and living debt free.