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FICO Score: “Crude Blunt Instrument” and “Asshole AWard of the Week Winner”

November 30, 2009
Factors contributing to someone's credit score...
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Haha, cracked me up every time I read it, the new evaluation of the FICO credit score, which is really a company’s attempt to keep financial data on people and report it to creditors.  Consumer advocacy group, U.S. PIRG calls FICO’s score evaluator a “crude blunt intstrument”:

“FICO imposes bigger hits than I would have thought for being maxed out or 30-days late just once, reinforcing my view that it is a cruder, blunter instrument than they like to claim. Nevertheless, it is a powerful, widely used crude blunt instrument,” says Ed Mierzwinski, consumer program director for the U.S. PIRG consumer advocacy group.

Sounds a little bit like the FICO company’s (multimillion company) rating system is like using a crow bar in place of a screwdriver, which banks use nonetheless.  Since we know how well banks have been doing lately, it’s probably safe to say that FICO has had some issues with its ability to calculate as well.

For example, the  higher the credit score, the more a late payment “costs” you in points.

Those with good or excellent credit — so-called prime borrowers — put more points at risk with each mistake. For example, someone with an average credit score of 680 who pays a bill 30 days late will see a drop of 60 to 80 points. But for someone with an excellent credit score — 780 — that same delinquency can send a FICO score tumbling by 90 to 100 points.

Rather counter intuitive, but we have just discussed the crudity of the FICO instrument, and this is how it’s lack of sophistication impacts a credit score.  I can’t help but be taken with the concept of a bank actually understanding money and doing some of this work on its own as opposed to buying credit information from a “crude blunt instrument.”  Ahh, the good old days–or were they?  We now know that the banks didn’t have the best information anyway and with executives siphoning profits to fuel their private jets, we may have just watched the biggest Ponzi scheme unfold in America with the banking industry.

Well, so much for fixing those things. I love how the average American is deemed “financially irresponsible,” like we are just too stupid to realize that losing a poorly paying job might affect our ability to pay for our mortgages and heat.  Really?  It comes as such a surprise that people can’t pay for those things when they lose their jobs.  Hey, I have an idea:  let’s blame the consumers when industries lay off millions of workers by saying that it’s all their fault that they spent money.  Didn’t they know job losses were coming?

Another analyst, truly a talking dumbshit, assumes that people don’t understand these deep and philosophical repercussions of job loss:

“If they know it in advance, they won’t go out and step in a pile of doo-doo. They won’t go out and do some of these things,” says Linda Sherry, director of national priorities with advocacy group Consumer Action.

Ah yes, the whole losing the home to foreclosure equivalent to stepping in “doo-doo” discussion.  Got it.  This fool later recants her worthy message of watching out for financial dog crap by saying:

Of course, knowing the impact on a FICO score and actually avoiding these mistakes are two separate things: Amid rising unemployment and other daily financial struggles, paying bills and staying on-track financially becomes a much bigger challenge for many borrowers.

“Some of these things are out of their control,” Sherry says of consumers.

Hmm, you think?  Because what I really think is that most Americans WANT to lose everything they have and then be lectured by self-righteous dumbshits about mistakes someone things they make.  When you consider that the majority of bankruptcies in this country, myself included, are caused by medical bills, this mouth-breathing spouting of how consumers should just pay their bills on time annoys the crap out of me.  Or, you could look at the statistics that most Americans who are in foreclosure have lost their jobs.  Americans are the people every other country loves to hate, the celebrity they want to see fall in the mud, but the financial industry after having been bought out by the government for their fuck-ups now wants to blame everyone else.

So, I will add Unasked Advices favorite moniker to the FICO company, allowing FICO to win the prestigious Asshole Award of the Week:  go FICO-Crude-Blunt-Instrument-Asshole-Award-of-the-Week!  Hurrah for FICO


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