The 5 Things They Don’t Tell You About Your FICO Credit Score

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When I was “knee deep in debt” I had two opportunities that I desperately wanted to take advantage of but couldn’t. The first was a 1960’s Chevrolet Apache pick up. It was only $1,500. A quick search on AutoTrader.com shows a similar quality truck at $11,500. It was a great deal and I couldn’t come up with a dime.

The second great deal can just before I paid off my debt. It was a 1970’s Toyota Landcruiser FJ-40 for only $1,500. It too was worth at least four times the asking price, but since my goal was to get out of debt I still couldn’t jump on this opportunity.

A third opportunity came recently, less than a year after I paid off all of my debt. By this time, I had saved my 3-6 months emergency fund, got my retirement fund fully funded at 15%, and a basic “slush-fund” for the deals that always seem to come along. I carefully weighed my desires against my needs, something that was completely foreign to me 3-years ago, and made the wisest decision I could. I passed. It felt great to know I could make wise financial choices.

Now compare these experience to what the banker judges of the desperate.
When lenders look at your credit score the following are the questions that they ask themselves? cha-ching is what they hear if you’ve been good at following their plans. “Their new lake-view cabin is going to be nice,” they think, as they draw up the new loan.

Here are the five things they ask themselves when they read your credit score.

    1. How well have they paid the interest on the money they’ve borrowed? cha-ching
    2. How much debt are they in? cha-ching
    3. How desperate are they to borrow more money? cha-ching
    4. How long have they had to borrow more and more money? cha-ching
    5. What are all the ways they’ve had to borrow money? cha-ching

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More for them and less for us, this is not a winning scenario. Not being in charge of our own money leads us to a form of bondage. And no one wants that. For instance, if you have had to file for bankruptcy you now have to wait seven years on the sideline while life passes you by, you know the pain it brings. No reasonable person who has had to file for bankruptcy wants to do it ever again!

 

We have disconnected from common-sense. I believe this is because we have abdicated our education for that of societies. It is easier to follow than to lead, to take charge and do your own in-depth research. It is mandatory in making wise decisions. Especially since we now know ‘google’ manipulates every search we do.

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When we don’t take the responsibility to keep ourselves informed with information from both side of every issue we are easily lead astray by our confirmation bias which blinds us to the other side of the issue. By this I mean, if we think that there is only one answer to every question we are ignorant indeed and have been manipulated by our societies focuses on “getting the right answer.” Not to thoroughly understand all sides of an issue so that you can make an intelligent decision is detrimental to your decision making.

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Learn to breakthrough the one-sided messages you receive. Look into both side of every issue and ask yourself, What’s in it for them? What do they get from what they are asking me to do? Does this help me or them? Taking time to ask questions such as these will help you make better decisions and will help you keep more of your money.

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