FICO stands for Fair Issac Corporation. Bill Fair and Earl Issac started a consulting company in the 1950s and developed FICO scores, which measure credit risk.
I keep trying to think of alternative definitions for the acronym FICO:
* Floating On Credit Crunch.
* Forget that I am oppressed by credit.
* Organization of instant credit Forever.
* Financially I am constantly overwhelmed.
* Fight the idiotic credit oppressors.
Those aren’t great (if you have a better definition of FICO, post it in the comments), but they convey how I feel about FICO scores right now.
I used to worry a lot about my FICO score. That’s not surprising, considering how the FICO score is touted as being so important. The mantra “protect your credit score” lives up to the mantra “you’re throwing your money away if you rent.” If you don’t have a good score you can’t keep borrowing money. But wait a minute. Do I really want to be good at borrowing money?
I can’t begin to describe the stress I used to feel about the possibility of a late payment. My credit score would be damaged! Oh no! Ironically, part of the reason we’re in debt is because I was trying to keep up a good score. She was worshiping at the FICO altar (as Dave Ramsey says).
When I learned how to make a prioritized spending plan (food and lodging come first, credit card payments don’t), the stress relief was enormous. My goal now is a zero credit score. If I ever go to zero, I’ll know I’m where I want to be, financially. A score of zero would mean that he had not borrowed money in many years.
By the way, it is possible to get a mortgage with a score of zero. There are mortgage companies that do manual underwriting and look at the big picture of your finances, not just your credit score.
I’m not advocating that everyone have a goal of a zero credit score; it’s just my own personal wish. For example, single mothers may have to worry more about maintaining a good score. But no one should have to worship at the FICO altar. FICO isn’t worth it enough. If he gets a few hits on his score, he’ll live to fight another day.
