FICO is worthless. Truly wealthy people understand that credit scores and credit bureaus and credit repors really don’t matter in the grand scheme of things.
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.
Credit. Buy things you don’t need with money you don’t have. Sounds like a country I know.
A FICO score can only help you get into debt, not become wealthy. Here are 5 reasons why FICO does not really matter:
1. Your FICO Does Not Cover the Nut.
Credit is worthless if your bills are covered by your income each month. If your income falls short, you have bigger problems than a low FICO score.
2. No Real Control Over Your Score.
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. Credit Bureau Mistakes.
Credit bureaus are not human, but boy can they make mistakes. And usually not in your favor.
Income is not really a factor in the credit score algorithm. Get a raise at work and FICO does not know or care. Pay all your expenses in cash and become a credit ghost. Mistakes stay on your report forever. Even debt discharged in bankruptcy somehow lingers.
4. Mounting Debt.
A high FICO paves the way to take on and use more debt. No one who pays their bills each month with a couple of dollars left over has any need for credit. A high credit score is meaningless for the wealthy and the modest.
Use credit so-called wisely (pay at least the minimum on time each month) and you will raise your FICO score and be flooded by bank offers to take more credit cards.
Lose your income or suffer a personal financial crisis, and all that built up debt just increases your woes.
5. No Legacy.
Death and taxes are inevitable. You can’t successfully avoid either. On the other hand, your credit score is left at the graveside.
Living a prosperous and wealthy life is a desire of most humans. I don’t mean just spiritual wealth, but real dollars. No man or woman can live to the fullest without money. Having a debt master will surely burden your life.
Eat real food. Drink fine wine. Make love to your wife before the sun comes up.
Live happily within your means.
Don’t lose a moment of your life to worry about a mathematical score your cannot control.
Look for more contrarian financial strategies at Burn Down the Freaking Mission.