FICO may not be the holy grail you have made it out to be. Wealthy people care about income and assets – not about credit and debt. Your credit score may actually be worthless to you.
So why does the average consumer worry so much about his credit rating? Brainwashing.
Simple. We have been taught to buy first, and worry about how to pay later.
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 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 and Incomplete.
Credit bureaus are not human, but boy can they make mistakes. And usually not in your favor.
What’s missing? Your income. Someone who just landed a big paying job gets no higher FICO score. Someone who pays cash (credit ghost) who has no debt is treated like a leper. Mistakes also happen. Credit bureaus are notorious for confusing similar names and keeping bad information on file even after notification by effected consumers.
4. Excessive 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.
If you have a high credit scores, banks will flood your mailbox with offers to give you more credit.
Lose your income or suffer a personal financial crisis, and all that built up debt just increases your woes.
5. No Legacy.
When your eulogy is read at your funeral, trust me, your FICO score will not be mentioned.
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 well. Get a full night’s sleep. Make love to your wife.
Live happily within your means.
If your credit rating is shot, bury it. You will sleep better at night.
Discover more alternative financial strategies at Burn Down the Freaking Mission.