Worshiping at the FICO Altar

FICO stands for Fair Issac Corporation. Bill Fair and Earl Issac started a consulting business in the 1950s and developed FICO scores, which measure credit risk.

I keep trying to think of alternative definitions for the acronym FICO:

* Floundering In Credit Oppression.

* Forget that I am crushed by credit.

* Forever Instant Credit Organization.

* Financially I am constantly overwhelmed.

* Fight against the credit crushing idiots.

Those aren’t very good (if you have a better definition of FICO, post it in the comments) but they convey how I feel now about FICO scores.

I used to worry a lot about my FICO score. That’s not surprising, consider how the FICO Score is touted as so important. The mantra “protect your credit score” falls short of the mantra “you are wasting your money 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 cannot begin to describe the stress I used to feel about the possibility of a late payment. My credit score would suffer! Oh no! Ironically, part of the reason we’re in debt is because he was trying to keep a good score. I was worshiping at the altar of FICO (as Dave Ramsey says).

When I learned how to plan for priority spending (food and shelter come first, credit card payments don’t), the stress relief was enormous. My goal now is a zero credit score. If I ever become zero, I will know that I am where I want to be, financially. A score of zero would mean that you hadn’t 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 am not advocating that everyone has 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 altar of FICO. FICO is not worthy enough of that. If you get a few hits on your score, you will live to fight another day.