Tuesday, October 19, 2010

Suze Orman's FICO kit (Ugh!)

 The secret to wealth and financial success is not to be found in gaming your credit score.  If you are obsessed over your credit score, ask yourself why.  The credit industry would like you to think this is an indicia of your overall financial health.  But money in the bank - a positive net worth - is the real "score" in the financial world, not how much you owe!

While Googling "Suze Orman" the other day, I came across an advert for her "Platinum FICO Kit" which sells for $49.95 (!!)  Fifty bucks to get information that is essentially free.

Now again, anyone who uses a fake name, whether it is Ayn Rand, Faith Popcorn, or Suze Orman is not to be trusted in my book, unless they are movie stars and the studio made them change their name.  The fake name-changers do so in order to better market themselves - creating a memorable trademark, so to speak.  And that is what they are all about - marketing themselves.  Shame on you for taking advice from such people!

As I noted in Your Really Free Credit Report you can get a free copy of your credit report every year, in most States, twice a year in others.  I do this occasionally, to check for bad data.  But as I noted in that post, as well as Gaming Your Credit Score,  you should really not obsess about your credit score a lot.

If you have bad credit, gaming the system isn't going to help.  If you have paid off all your debts, you will have good credit and don't need to game the system.  As the old saw goes, in order to borrow money, you first need to prove you don't need it.  If you pay your bills on time and don't take on too much debt, you will end up better off in the long run that the guy who is constantly borrowing and trying to "game" his score so he can borrow more.

The "Suze Orman Platinum FICO" kit basically allows you to get a few paid credit reports as well as the coveted scores.  It also allows you to "game" the system by making hypothetical changes to your debt balances and other data and seeing how they affect your score.

The credit score is an interesting gag, as it is considered proprietary information of the credit bureau, and unlike you credit history, their property, not yours.  How it is even calculated is somewhat of a mystery, although in general, if you have paid off all your debts, your score will be more than fine.  Under the law, the credit reporting agencies have to provide you free access to your credit reports, in most States.  So they created the "credit score" as a means of creating a bit of intellectual property that they have exclusive rights to - and you have to pay to see.

Should you obsess about your score?  To me, I think not.  As a landlord, I pulled credit reports on prospective tenants, and to me the score was meaningless.  What I was interested in was the patterns of debt and debt payment, knowing how much debt the tenant had, whether they were responsible about it, as well as a long history showing they existed in time and space.  A mere number is meaningless.

The credit "scores" are used most often by the places you are least likely to want to borrow money - consumer finance agencies, car dealers, and the like.  And the second gag on the "score" nonsense is that they use your "poor credit score" to steer you to lower grade (and higher interest rate) financing.

"We're so sorry Mr. Smith!  But your credit score is too low to qualify for the zero percent interest rate!  And since we already put temp tags on the car and you drove it home - and since we already sold your trade-in, why don't you come down to the dealer tomorrow and sign the new loan papers. Bring Vaseline, I hear it helps!"

So having a high credit score only means you might be able to snag some of these come-on consumer loan deals that you should be walking away from, anyway.  After all, zero percent financing is fine and all, but it usually means you don't get the $1000 rebate.  Nothing "free" is really free.

And of course, if you pay off all your debts, you don't NEED a credit score, anyway.

Again, you HAVE TO get out of the mindset that the banks are "doing you a favor" by loaning you money.  You have to pay it back - with interest!  So hoping for a "high credit score" is just poverty-think - the sort of thing that people who do paycheck loans and rent-to-own furniture engage in.

People think that because the bank "gave them a loan" (emphasis on the word GAVE) and they GOT a car, that the bank is like Santa Claus, handing out gifts.  But you are the customer - the client - in this deal, and you are the one paying for everything and should be the one calling the shots - unless you stop paying.  Many consumers have it all backwards - thinking they are "lucky" to get financed, when in fact, it often is the worst financial decision they make in their lives.

I am very disappointed in Suze ("Sooze") Orman.  When she first started out, she had some rational advice for people - buy a car and keep it for 100,000 miles, that sort of thing.  Avoid having monthly car payments and a lot of consumer debt.  But then she sold out to advertisers - first Buick, then SeaRay, now the credit score people - and who knows who else? And she now promotes spending and consumerism in her "Approved!" show, where she acts like Santa Claus telling people what toys they can buy next.  It appeals to an idiot mentality - and makes her a lot of money.

It would seem that "the man" has gotten to her, and her success has lead her to shill for whoever pays the most.  It is very sad, but most of these financial gurus do the same thing, over time.  And with the money they throw in their face, you can't blame them!  Hey, toss some my way, I'll shut up and tell everyone to take out multiple loans!  Well, maybe not.

If you really want to get ahead financially, keep the $49.95 Suze wants for her "FICO kit" in your wallet and use it instead to pay down debts.  If you are in financial difficulty, cut back on SPENDING rather than asking if you are "Approved!" to buy or borrow more.  Sell off assets and pay down debts.  Make your goal to be DEBT FREE, not to have a better credit score!

Because once you are DEBT FREE, you won't care a rat's arse about your credit score!

The "Suze Orman Fico Kit".. Sheesh!  People buy this crap?  And think it is good financial advice?