Wednesday, November 4, 2009

798 ... So What

Earlier this week I went to the credit union to transfer my Health Savings Account from the soon to be fee based account at a big brick and mortar bank - remember, my previous employer covered the fees as an employee benefit, but now that I'm no longer an employee, the benefit goes away.

Side note: can I tell you how beautiful the credit union was on the inside? Wow, either this one is special or I've just been missing out since I never seemed to qualify for any memberships. There were specialty coffees, bottled water, baked goods, friendly employees, comfortable seating, gorgeous decor, you name it ... just completely different than what I'm used to. What does any of this have to do with 798? Glad you asked.

As I was sitting with the rep waiting on her to process my paperwork, she said "wow, you have a credit score of 798." Perhaps I was supposed to be happy or proud of myself, but I was actually pretty stoic. I wasn't sure what kind of response she expected, if any at all. I've vented before about my frustration with our obsession over the fico score. It's my goal to never borrow money again, so if I'm not going to borrow money, mister fico becomes less of a factor in my life. To some I might trend on a little financial irresponsibility because I don't check the score. Well, to that I say this, I pay all of my bills on time and I check my credit report at least once a year (primarily to watch out for identity theft). My home purchase in 2003 was the last time I borrowed money. Prior to the rep telling me what my score was, I had no idea. And now that I know it, so what;-).

You know what's crazy? There was a time in the very recent past that my 798 score would have given me access to all kinds of debt, even though my income right now is zero! How does that happen ... easy, the fico score only measures how you handle debt, it's not an indication that you can really afford what you're trying to buy. I could have gotten a mortgage easily, with zero income. Why? Because my fico score would've had lenders and underwriters drooling over me, anxious to throw money at me. Oh, and don't let me get started on the pre-approved credit card offers. I accumulated a month's worth of pre-approved credit offers once and they grossly totalled a quarter of a million dollars worth of credit opportunities.

Not to worry, I won't always have this problem because one day I won't have any debt, including my mortgage, and then mister fico will turn on me and my score will begin to drop? You see, if I don't have any debt to service, mister fico doesn't have anything to measure ... and well, if mister fico doesn't have anything to measure, nothing divided by nothing is zero.

In my opinion, credit scoring has its place, but it shouldn't be the end all, be all. Any system that penalizes me for not borrowing money is a system that I bow out of graciously and happily.


Money Funk said...

Amen, sista! I don't use Fico score. I use the Vantage Score. LOL. And I forgot what that score was already. I know I need to boost it up.

It is a pity that systems measure by a scale of consumer debt accrued vs. paid. If you pay by cash you are SOL - well according to consumer America.

Good for you and your hard work. Whip out those saving account statements and the IRAs to show them your wealth.

I guess the ratio of cash paying, nonborrowing citizens is to nill to create a scoring system for them.

Ms. MoneyChat said...

I like how you're thinking Christine. A scoring system cash paying, nonborrowing citizens would be great, or at least interesting;-). I like!

Anonymous said...

Kudos! Cash is the only way to go! Credit can enslave you if you allow it to....Break free of the chains!!! woo hoo!

Shtinkykat said...

Never considered the FICO scoring system to be a bit of a rat race, but you're right. Unfortunately, Mr. FICO still has me by my... ummm... throat. One day, I shall break free from Mr. FICO's Vadar-like death-grip. (Wow. That was so nerdy.)

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