FICO NoMo

I’ve got a new goal in life. My intention is to go off the financial grid completely. To put it plainly, I am aiming for a FICO score of zero.

This won’t be easy, people. I’m not even sure how many years a person has to have no debt (including no home loan) before falling off the FICO radar screen. All I know is that I’ve had enough of the bizarre belief that a high score ensures my future security. All a high score does, in reality, is label me as someone who loves debt, is committed to it, and who, no matter how long she lives, can’t seem to get out from under it.

I’ve haven’t charged anything to a credit card since I don’t know when, but you wouldn’t believe how much credit I have available to me. Let’s just say that it’s enough to live high off the hog for several years, even if we were completely without income. Until now, I’ve been afraid to close any of these lines of credit. Somehow, they have come to represent an actual cushion to me, especially since Doug and I are self-employed. We have no vacation or sick days or matching 401K to fall back on. If Doug’s business were to fold, we sure wouldn’t have a severance pay to tide us over until the next position came along.

You know what’s truly pathetic? Elevating a FICO score to a godlike position in my life is like thinking of an available line of credit on my home equity as an emergency fund. The truth is, there is no substitute for having actual cash set aside in an interest bearing account, in an amount which could cover many months of expenses should life take an untoward turn.

Besides, the days of imagining that your home equity can save you are rapidly drawing to a close. Many HELOC (home equity line of credit) lenders are sending letters to their customers to let them know the gravy train has reached the end of the line. This morning, I read a story of a homeowner with a $160,000 line of credit on her million dollar house—a line of credit she had NEVER used—who was advised by the lender that, because of falling housing values, the amount she could borrow was being reduced to $10,000. Lenders are free to shut down your lines of credit (including credit cards) whenever they please, for whatever reason they see fit.

So, yes, we are committed to no more car loans and no more credit cards. But what if we were to purchase a different home? Wouldn’t we have to have a FICO score (and a nice high one, thank you!) in order to manage that with the lowest interest rate possible? The answer is no.

While four out of five mortgage lenders will not work with buyers in the absence of a FICO score (and, believe me, I doubt the issue comes up very often…), 20% still will agree to do a “manual underwriting” of a loan application. This represents considerably more work for lenders, since instead of using the customer’s FICO score as evidence of their creditworthiness, they must actually ascertain the character of the borrower (anyone remember character references?), make a rational judgment concerning collateral and capacity for repayment, and gather tons of supporting documents pertaining to income, length of employment, etc.

In other words, any company that agrees to a manual underwriting has to have employees who are capable of and authorized to apply logical thought processes to the transaction, as in the days of yore.

All my excuses for not taking my FICO to zero have officially disappeared. The last thing I want on my tombstone is “She loved her own life, even unto debt.” The best way I can think of to prove it is to eschew borrowing right down to the bone.

The skeleton upon which the bloated body of personal indebtedness is hung these days is definitely the cherished, almost hallowed FICO score. What should be considered vice is now considered virtue.

I say we turn the whole system on its head. It will take more personal responsibility and fiscal discipline that I’ve been able to muster thus far in my life, but I truly desire to join the ranks of those who can honestly say, “FICO score? We don’t need no stinkin’ FICO score!”

Anyone with me?

Posted by Katy on 03/31/08 at 09:32 AM

Fallible Comments...

I'm with you. We could care less about our score. We're not in the market for more debt. It's all a ploy to get people to think that they're cool because they can borrow a lot of money and be enslaved to the bankers. No thank you.
Posted by Suzan on 03/31/08 at 12:36 PM
Suzan--Since you've got an amazing background in the banking industry, I'd love to hear how you view the Fed bank's "new powers." IMO, all we need is another group manipulating the markets, especially a bank which seems to be positioning itself so that the government answers to IT. Frankly, I find it frightening.

And please, do we HAVE to have bail-outs not only for every industry known to man, but also every INDIVIDUAL??? OK, ahem, now you know what I think!!
Posted by Katy on 03/31/08 at 01:39 PM
I have a much more reasonable goal - to have $1,000 in a savings account somewhere, someday. I think it's possible. My dad retired with $0 to his name and when he died 20 years later, he had $75,000. Of course, he managed to "die healthy," so that helped. I personally would be willing to live without a "bailout," but you can't do that if you have children or a spouse. But I've been homeless before, with two dependents, so being homeless some time in the future, without dependents, doesn't really alarm me.
Posted by alison on 04/01/08 at 04:36 PM
Whew! Glad to find out what FICO meant or my web nazi would find another reason to block your site!
Posted by Christa on 04/01/08 at 06:41 PM
Alison--I still would like to know how your dad managed what he did. It's an amazing story. And I feel certain the Lord will honor the faith you show in following Him. I say that because I know you personally, and admire your character!

Christa--I KNOW!!! Crazy that an innocent site like mine can get blocked. I'm happy you keep taking a chance on me!! :)
Posted by Katy on 04/02/08 at 06:09 PM
Katy, I really love your writing style. I'm a new reader!
Posted by businesses on 04/02/08 at 07:02 PM
katy - you sound suspiciously like dave ramsey here. the idea of paying cash for life, for not spending more than you make... how "old school" is that? i love it. it too is my goal to have a zero fico score. kudos to you and doug and thanks for the encouragement!
Posted by joshua on 04/03/08 at 09:17 PM
Um, yeah. Thanks, Biz.

Joshua--I admit it. I heart Dave Ramsey. We took my daughter and her then-fiance to see him in KC last Spring. I am SO PROUD of the amazing job they've done since they got married in June!!! They won't regret getting started off on the right track--especially if they stay on it. Ha. I chuckle every time Dave says, "We give you the same financial advice your Grandma would, only we keep our teeth in." When I was maybe 12, my grandfather told me NEVER to take out a mortgage to buy a house. (It went without saying that you did not borrow for a car...) He and my grandmother built a beautiful house with CASH. When they'd temporarily run out of money, the building came to a halt. The winter they moved in, they didn't have a furnace because they'd run out of cash. But by the time I was 12, they were quite wealthy. Amazing examples, and they kept THEIR teeth in, too.

FICO No Mo!!!! :)
Posted by Katy on 04/04/08 at 06:41 AM
I know, long time no comment. Life has been he...hectic lately.
I cut up credit cards, eschewed debt (once I dug us out from medical bills) and said "Who cares?" about my "credit score" since I'm not borrowing any money no mo' no mo'...

Well, circumstances changed and the need arose to see my banker. I too figured with no credit cards, no debt, no "open accounts" my score would be zip.

It was like 789...huh? Credit scores are a scam from top to bottom. Just like that lie we were all told, "Well you need one credit card to establish credit."
When you really need a loan, your banker is going to rely on the records of one of the credit reporting agencies and I guarantee it will be the one who still can't remember you paid your mobile bill in 1971 and sent them proof. Plus, if you are married, they're going to look at your spouses credit.
With a credit score higher than I could ever envision my bank offered me a loan at 10%...

Pay in cash...if you can't than don't buy it. Loan yourself money and pay it back with interest from your savings. It's all discipline.

I know it's easier said than done...believe me I've cut up more credit cards and screamed how stupid I/we have been while vowing NEVER to let this happen again...at least 9 times in my life.

Now however I do at least know the score :)

FYI Now that I paid off that "loan"..paid off all our debt but our home...my FICO is still well below 780.

However, my waist line keeps going up no matter what I do :)

Blessings,

M
Posted by Michael on 04/04/08 at 06:49 AM
M #1--Life's kind of getting away from us, huh? I have not been leaving comments much, either, but I DO read your site!! It sounds like you two have been fantastic progress!! No debt but the house is amazing. I sincerely hope you are rewarded with a low FICO score for all your effort! :) I have no idea what our score is, but I have a feeling it's WAY too high. I'm ashamed of us that we haven't brought it closer to zero by now, but today's a new day, and we will keep trying until we achieve our goal! Many blessings to you and Amy....
Posted by Katy on 04/04/08 at 10:28 AM
GOOD! I am also joining the cash only "F u CK FICO" crowd! I am not going to take up debt just for the sake of um... getting more debt. I find it rediculous in this society a person is "reliable" if they cary debt. So if I pay off all my bills in life, I am unreliable? This is what is expected from a nation with a 10 Trillion dollar debt.
Posted by Steven on 01/24/09 at 05:50 AM

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Personal blog of christian writer & fallible mom Katy McKenna Raymond in Kansas City, Missouri Katy is represented by Greg Johnson at WordServe Literary Read more Katy at LateBoomer.net Follow Katy on Twitter Follow Katy on Facebook 123 Recent Posts Try Becoming Brenda Starr Off Beat Scattered That’s It So I’ve Finally Signed With An Agent. Now What? The Spoon Sciatica Sweetheart A Woman’s Train of Thought Has No Caboose However much we own, we are all still living on borrowed time After all, when restaurants shrink portions, they don’t shrink prices. As with everything in life, balance is key. Slow down, you move too fast… Yeah, I know. I have issues. Search Advanced Search Syndicate Login E me at katy @ ngenius.com	FICO NoMo I’ve got a new goal in life. My intention is to go off the financial grid completely. To put it plainly, I am aiming for a FICO score of zero. This won’t be easy, people. I’m not even sure how many years a person has to have no debt (including no home loan) before falling off the FICO radar screen. All I know is that I’ve had enough of the bizarre belief that a high score ensures my future security. All a high score does, in reality, is label me as someone who loves debt, is committed to it, and who, no matter how long she lives, can’t seem to get out from under it. I’ve haven’t charged anything to a credit card since I don’t know when, but you wouldn’t believe how much credit I have available to me. Let’s just say that it’s enough to live high off the hog for several years, even if we were completely without income. Until now, I’ve been afraid to close any of these lines of credit. Somehow, they have come to represent an actual cushion to me, especially since Doug and I are self-employed. We have no vacation or sick days or matching 401K to fall back on. If Doug’s business were to fold, we sure wouldn’t have a severance pay to tide us over until the next position came along. You know what’s truly pathetic? Elevating a FICO score to a godlike position in my life is like thinking of an available line of credit on my home equity as an emergency fund. The truth is, there is no substitute for having actual cash set aside in an interest bearing account, in an amount which could cover many months of expenses should life take an untoward turn. Besides, the days of imagining that your home equity can save you are rapidly drawing to a close. Many HELOC (home equity line of credit) lenders are sending letters to their customers to let them know the gravy train has reached the end of the line. This morning, I read a story of a homeowner with a $160,000 line of credit on her million dollar house—a line of credit she had NEVER used—who was advised by the lender that, because of falling housing values, the amount she could borrow was being reduced to $10,000. Lenders are free to shut down your lines of credit (including credit cards) whenever they please, for whatever reason they see fit. So, yes, we are committed to no more car loans and no more credit cards. But what if we were to purchase a different home? Wouldn’t we have to have a FICO score (and a nice high one, thank you!) in order to manage that with the lowest interest rate possible? The answer is no. While four out of five mortgage lenders will not work with buyers in the absence of a FICO score (and, believe me, I doubt the issue comes up very often…), 20% still will agree to do a “manual underwriting” of a loan application. This represents considerably more work for lenders, since instead of using the customer’s FICO score as evidence of their creditworthiness, they must actually ascertain the character of the borrower (anyone remember character references?), make a rational judgment concerning collateral and capacity for repayment, and gather tons of supporting documents pertaining to income, length of employment, etc. In other words, any company that agrees to a manual underwriting has to have employees who are capable of and authorized to apply logical thought processes to the transaction, as in the days of yore. All my excuses for not taking my FICO to zero have officially disappeared. The last thing I want on my tombstone is “She loved her own life, even unto debt.” The best way I can think of to prove it is to eschew borrowing right down to the bone. The skeleton upon which the bloated body of personal indebtedness is hung these days is definitely the cherished, almost hallowed FICO score. What should be considered vice is now considered virtue. I say we turn the whole system on its head. It will take more personal responsibility and fiscal discipline that I’ve been able to muster thus far in my life, but I truly desire to join the ranks of those who can honestly say, “FICO score? We don’t need no stinkin’ FICO score!” Anyone with me? Posted by Katy on 03/31/08 at 09:32 AM Fallible Comments... I'm with you. We could care less about our score. We're not in the market for more debt. It's all a ploy to get people to think that they're cool because they can borrow a lot of money and be enslaved to the bankers. No thank you. Posted by Suzan on 03/31/08 at 12:36 PM Suzan--Since you've got an amazing background in the banking industry, I'd love to hear how you view the Fed bank's "new powers." IMO, all we need is another group manipulating the markets, especially a bank which seems to be positioning itself so that the government answers to IT. Frankly, I find it frightening. And please, do we HAVE to have bail-outs not only for every industry known to man, but also every INDIVIDUAL??? OK, ahem, now you know what I think!! Posted by Katy on 03/31/08 at 01:39 PM I have a much more reasonable goal - to have $1,000 in a savings account somewhere, someday. I think it's possible. My dad retired with $0 to his name and when he died 20 years later, he had $75,000. Of course, he managed to "die healthy," so that helped. I personally would be willing to live without a "bailout," but you can't do that if you have children or a spouse. But I've been homeless before, with two dependents, so being homeless some time in the future, without dependents, doesn't really alarm me. Posted by alison on 04/01/08 at 04:36 PM Whew! Glad to find out what FICO meant or my web nazi would find another reason to block your site! Posted by Christa on 04/01/08 at 06:41 PM Alison--I still would like to know how your dad managed what he did. It's an amazing story. And I feel certain the Lord will honor the faith you show in following Him. I say that because I know you personally, and admire your character! Christa--I KNOW!!! Crazy that an innocent site like mine can get blocked. I'm happy you keep taking a chance on me!! :) Posted by Katy on 04/02/08 at 06:09 PM Katy, I really love your writing style. I'm a new reader! Posted by businesses on 04/02/08 at 07:02 PM katy - you sound suspiciously like dave ramsey here. the idea of paying cash for life, for not spending more than you make... how "old school" is that? i love it. it too is my goal to have a zero fico score. kudos to you and doug and thanks for the encouragement! Posted by joshua on 04/03/08 at 09:17 PM Um, yeah. Thanks, Biz. Joshua--I admit it. I heart Dave Ramsey. We took my daughter and her then-fiance to see him in KC last Spring. I am SO PROUD of the amazing job they've done since they got married in June!!! They won't regret getting started off on the right track--especially if they stay on it. Ha. I chuckle every time Dave says, "We give you the same financial advice your Grandma would, only we keep our teeth in." When I was maybe 12, my grandfather told me NEVER to take out a mortgage to buy a house. (It went without saying that you did not borrow for a car...) He and my grandmother built a beautiful house with CASH. When they'd temporarily run out of money, the building came to a halt. The winter they moved in, they didn't have a furnace because they'd run out of cash. But by the time I was 12, they were quite wealthy. Amazing examples, and they kept THEIR teeth in, too. FICO No Mo!!!! :) Posted by Katy on 04/04/08 at 06:41 AM I know, long time no comment. Life has been he...hectic lately. I cut up credit cards, eschewed debt (once I dug us out from medical bills) and said "Who cares?" about my "credit score" since I'm not borrowing any money no mo' no mo'... Well, circumstances changed and the need arose to see my banker. I too figured with no credit cards, no debt, no "open accounts" my score would be zip. It was like 789...huh? Credit scores are a scam from top to bottom. Just like that lie we were all told, "Well you need one credit card to establish credit." When you really need a loan, your banker is going to rely on the records of one of the credit reporting agencies and I guarantee it will be the one who still can't remember you paid your mobile bill in 1971 and sent them proof. Plus, if you are married, they're going to look at your spouses credit. With a credit score higher than I could ever envision my bank offered me a loan at 10%... Pay in cash...if you can't than don't buy it. Loan yourself money and pay it back with interest from your savings. It's all discipline. I know it's easier said than done...believe me I've cut up more credit cards and screamed how stupid I/we have been while vowing NEVER to let this happen again...at least 9 times in my life. Now however I do at least know the score :) FYI Now that I paid off that "loan"..paid off all our debt but our home...my FICO is still well below 780. However, my waist line keeps going up no matter what I do :) Blessings, M Posted by Michael on 04/04/08 at 06:49 AM M #1--Life's kind of getting away from us, huh? I have not been leaving comments much, either, but I DO read your site!! It sounds like you two have been fantastic progress!! No debt but the house is amazing. I sincerely hope you are rewarded with a low FICO score for all your effort! :) I have no idea what our score is, but I have a feeling it's WAY too high. I'm ashamed of us that we haven't brought it closer to zero by now, but today's a new day, and we will keep trying until we achieve our goal! Many blessings to you and Amy.... Posted by Katy on 04/04/08 at 10:28 AM GOOD! I am also joining the cash only "F u CK FICO" crowd! I am not going to take up debt just for the sake of um... getting more debt. I find it rediculous in this society a person is "reliable" if they cary debt. So if I pay off all my bills in life, I am unreliable? This is what is expected from a nation with a 10 Trillion dollar debt. Posted by Steven on 01/24/09 at 05:50 AM Page 1 of 1 pages Commenting is not available in this weblog entry. Next entry: Lord Of The Onion Ring Previous entry: The Memory Keeper's Daughter << Back to main


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Personal blog of christianwriter & fallible momKaty McKenna Raymondin Kansas City, Missouri

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FICO NoMo

Personal blog of christian
writer & fallible mom
Katy McKenna Raymond
in Kansas City, Missouri