Friday Financial Tidbit-Do not be defined by your FICO score

The FICO score was invented to help determine one’s credit worthiness. However, somehow over the years it has morphed into something even bigger where we judge people based on whether or not they have a good credit score. The following clip illustrates this concept: (first 49 seconds)

Whether or not you need a high credit score depends on whether or not you are going to be borrowing money in the future. But please do not let your credit score define who you are as a person. There are plenty of good people that I know who have low and high scores. Likewise, there are a ton of jerks that have low and high scores. Whatever you do, do not borrow money and take out more debt simply to increase your credit score. People might be impressed when you say you have a 800 FICO score, but doing whatever it takes to raise your score will cause you financial harm down the road.

There are plenty of good ways to define who I am as a person. My faith, family, and the relationships I have are among the most important. But my FICO score is not one of them.

Have you gotten caught up before in being defined by your FICO score? If so, how did you change your mindset?

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4 Responses to Friday Financial Tidbit-Do not be defined by your FICO score

  1. Keith Bunn says:

    A couple of years ago, there was a guy that knew that I helped people with their financial issues. He asked me how he could get some errors taken off his credit report. If I remember right, he was a Jr. & some of his dad’s stuff was on his credit report. After I explained to him what he needed to do, he thanked me & told me that he was trying to get a really high credit score. I told him that I wasn’t worried about my score because my wife & I were getting out of debt. I also told him that I hope my score becomes zero. There was a slight pause in our conversation & with a confused look on his face he asks, “Dude, how are you going to get stuff?” I laughed & said, “With cash!”
    I just thought I’d share that funny story with you. By the way, I agree 100% with you on the topic!

  2. Jon White says:

    Thanks for sharing Keith. That is a rel good story. It is amazing how in this culture we feel the only way we can get things is by having a huge credit score.

  3. THAT IS SO AWESOME!

    OK, his score was really bad (vide0). The ONLY way to have a bad score (and I do mean ONLY) is to not pay your non-qualifying bills. Non-qualifying bills are things that don’t help your credit score like rent, cell phone, electric. Then yes, you don’t need to look any further into someone’s credit report to see that they are a poor risk. 

    But who cares about credit scores? Banks. When was the last time a consumer used their own score? Never. But we have been told it’s important by businesses who want a quick and easy way to judge us and financial “experts” who want to sound sophisticated when they use a silly word like “Ding” (everyone should know whom I am speaking of right now). UGH!

    • JWFinancialCoaching says:

      Great point Steve. One of the flaws (there are many) of the FICO score is that bills such as rent, utilities, and cell phones don’t help your score . . . unless you miss a payment then it hurts your score. But like you said, the only people who should care about your credit score is the banks, but we’ve been taught to believe that part of our character is tied to our FICO score. How sad is that?

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