Learn How Credit Words

I named this article “The FICO God” because I saw someone pray to FICO, the God of credit in Wal-Mart the other day. A woman in front of me at the checkout counter slide her credit card, closed her eyes, bowed her head, and prayed; “Please, Please, PLEASE!” When she opened her eyes, first one, then the other the FICO God answered her prayer; “APPROVED”. She then looked up and mouthed the words “Thank you”.

A Long, Long Time Ago in a galaxy far away (actually it was right here in the 70s) when someone’s word was their bond there were no credit bureaus. The only way a lender had to check how you paid your debt was to call some place that you had charged something and ask the merchant how you paid. As more and more people started buying on time, the merchant had to answer more and more calls, soon it became an enormous expense to hire someone to answer all the inquiries. We are a very litigious society and many of the mechanics were getting sued for reporting that the customer didn’t pay very well.

Some diabolical genius came up with an evil plan. He started the first credit bureau. The purpose of a credit bureau was to act as a buffer between the merchants and the customers. The merchants could fire the person who they hired to answer all those credits inquiries and only pay the credit bureau a small fee each month. The credit bureau would also act as a buffer between the customers and the merchants. This is the way it began, and it grew into the monster it is today.

The banks and other lending institutions then saw a way to use the credit bureaus to increase their profits. Lenders never wanted to refuse anybody credit they simple wanted to charge people a lot more interest. Two men named Fair and Isaac came up with a scoring system they named after themselves Fair Isaac Corporation or FICO. I promise you there is nothing fair about Fair Isaac Corp. The banks, lenders and insurance companies uses the low FICO score to justify why people had to accept paying a higher interest or a higher premium than people with higher scores paid. If the people with the lower FICO scores complained they were told “There is nothing we can do about your rate because your FICO score dictates what you pay”. How conveeeient’. It’s like saying that the cost you must pay is not our fault the FICO god has chosen your fate and rate.

They have taken away your name and given you a number. Merle Haggard has a song called Branded Man which describes it perfectly. “I’ve paid the debt I owe them, but they’re not satisfied now I’m a branded man out in the cold”. These credit bureaus have branded us with a number that means more than our name. This brand now controls almost everything we do and everything our children will do. It drives us to drugs, alcohol, lying, depression, stealing, divorce, humiliation, depression, and desperation. It is eroding our capitalist system and is stealing our liberty. 

 Do you know why the credit bureaus reports bankruptcies for 10 years and bad credit for 7? Because they want to. There is no law that requires them to track these things for any time but the longer they can track bad credit the higher the interest rate they can justify. They want to lend you money and they want to make more money. Understanding how this game is played will help you control your finances and spend less money.

We will discuss how to get you credit score up later or how to establish it. Don’t let your credit be like a beloved dog that now id rabid; it started out loving you but now it wants to bite you.