Feb 10th, 2020 | Money Podcast

YOUR CREDIT SCORE COULD BE GOING DOWN WITHOUT YOU KNOWING Also, is it worth the effort to get your credit score from the 750s to the 800s? Should you pay off old credit cards you don't use anymore? Should you be totally out of mutual funds and stocks at this point? Should you sell vehicles that are underwater in order to eliminate debt? Tom knows!

Here is the story from the Wall Street Journal about the upcoming changes to how FICO credit scores are calculated.

Click here and get yourself an American Express Blue Business Card like the one Tom discussed in this episode.

Send your money questions to Tom right NOW: tom@blowmeuptom.com.

HOUR 1

Comments

Submitted by TallTim on

My score actually increased a bit, so its still above 800.

I think if you had bad credit to begin with, your score would drop -- but if you're in good shape, it could increase depending on a few factors.

These bastards always drill my kneecaps about borrowing 25,000 USD for a personal loan -- but I don't need one, so they can pound sand. They always come after you when you DON'T need a loan, lol.

Submitted by Faithful LIstener on

FICO is under attack for having its score used as part of the explanation why the underclass does not get loans. The new system will emphasize the differences between the over 700, and the under 500, FICO scores. Over 700, better than ever. Under 500, more than ever, by attracting the "unbanked" - a heavily minority based demographic cluster. This, combined with the ZIRP regime - zero interest rate financial system - has forced the banks to look to "nontraditional" sources of profitability, and the key is fee based income. "Non traditional," as in automobile title loans, and pawn shops - Wells Fargo ran a chain of pawn shops! - "Fee," as in what you pay when you bounce a check. The criticism of not lending to the uaabnked underclass is rebutted with the new FICO model, at least so far as FICO is concerned. By looking at nontraditional payment models - like utility payments - and fitting them into FICO, the below 600 demographic will increase dramatically, for a season. Loans will be made, and these will be profitable, indeed. Remember, among this demographic, one bounced check leads to a series of missed payments, and the fee income from these accelerate the defaults, and increase the profitability. Think of the de facto interest rate you pay on a bounced check. Breathtaking! Multiply by millions - the unbanked underclass. The key is to get them into the banking system, and a key for that, and the loans this system is based upon, is a FICO score - ANY FICO score.

Incidentally, what was the first significant unbanked underclass brought into The System?

College students, with student loans.

They all have FICO scores, now!

All the more reason to listen to Money Mondays, and avoid the traps.

Submitted by Daniel Klock on

Faithful Listener has nailed it, called out the racket, such as it is, for those who choose to participate. Whoa ... Another great financial tutorial, Mr. Leykis!

Submitted by Faithful LIstener on

Wallethub has a tremendous article on car debt ("title loans") and income. No wonder banks want in on this action.

https://wallethub.com/car-payment-calculator

None of these people will ever listen to Tom. None of these people will ever be out of debt. They are the New Serfs, and debt is their currency.

Thanks for Money Monday!

A quick observation: when Tom came back, a lot of his listeners sounded like they ignored his advice in his absence; knocking up women, getting in debt, all the things Tom preached against, and showed them how to avoid. The car debt numbers show the difference between those who invest wisely, with a subscription to Premium Tom, and those who fear answering the phone.

Ignore Tom's advice. Ignore, and remain poor. I thought Tom might be have been a little extreme about saving money when he said make you own coffee and bread at home. Hell, his was the moderate position.

My advice on another thread is more valid than ever. Work a second full-time job, if you must, but follow Tom's Tips on Money ruthlessly. Get out of debt - all debt - while you can, because these people, and their ranks grow dramatically, daily, will never be out of debt.

Let's call them the 400 FICOs, because that is where they are, and will be.

They will never have control over their lives. THAT''S the tragedy.