Recession Trend Tracker: What's Hot, What's Not

Check back weekly for my "In and Out" chart following the most fabulous, ridiculous, and relevant events in the economy.

Comments

[sweetpaws]

You would think "no clue what FICO score is" would be considered "out" -- anyone who is concerned about their finances (and the author indicated that's "in") would want to learn their FICO score and make efforts to improve it. BTW, a high FICO score is a good thing. Why is that listed as "out"?

[Jill Keto - Huffpost Blogger]

Good question. The point is that the FICO score is a false indicator of financial stability. People tend to believe that if they have a high FICO score, this is an invitation to rack up debt, including buying homes that are way out of their price range. The "In" trend is to try to produce, save and pay cash, instead of racking up debt. There is certainly nothing wrong with having a high FICO. But the irony is that people that don't have any debt have a lower FICO score. This system is seriously flawed.

Many high net worth people that pay cash for everything generally don't even know what their FICO score is, because it is irrelevant to them.

The other issue is that people are now willing to risk their FICO score to get a loan modification. Skipping payments suddenly gets the bank's attention. This is wrong, but it's happening.

I like to say that FICO really means "Forever Indebted to Corporate Organizations"
Thanks for the question!