Credit where credit is due September 23, 2011 9:38 PM   Subscribe

Okay, am I crazy or did I just hear the voice of our dear leader on the teaser for next week's Marketplace?

There's no mention of it on the site, but they're covering credit scores and I know Matt complained about 'em on his blog recently.
posted by eamondaly to MetaFilter-Related at 9:38 PM (98 comments total) 5 users marked this as a favorite

It really happened.
posted by mathowie (staff) at 9:58 PM on September 23, 2011




dear dear.

fucking autocorrect.
posted by babbyʼ); Drop table users; -- at 9:59 PM on September 23, 2011 [18 favorites]


What's this "retirement" you speak of?

And my score isn't much lower than yours and I've had a lot of late payments and such (mostly through neglect).

It's also ironic for me that I am also at one of the better points in my life finically. I have little discretionary money, but I've also stopped using credit, so each month I get a tiny raise!

What no one mentions in that article is why you should care about your score. If you already have a hour and don't plan to use credit cards who cares?
posted by cjorgensen at 10:23 PM on September 23, 2011


So here's the backstory on this you might have missed:

If you check out my original post, there's a guy replying to most every comment critical of the credit industry. Turns out he used to work for FICO and is now a credit consultant that appears on TV or radio almost daily to talk about credit. The NYT money blogs picked it up and gave him a soapbox to say how wrong I was, and then NPR's money show saw that and contacted me.

I love NPR and support The Sound of Young America on PRI and NPR stations, so I agreed to appear on their show to talk about it. I figured it was going to be me talking for ten minutes and then the credit guy talking and they could edit it up into a show.

At the last minute the producer emailed to say instead of doing separate recorded bits, they preferred to have us both talk live but that it wouldn't be a debate or anything, and it would still be recorded and heavily edited weeks before it aired. I have a strict rule to never do live TV or radio (long story but I had a bad experience and unless you are a trained media person that can stick to talking points don't ever do live TV or radio) and every bone in my body told me to say no, but I said yes because hey, it's NPR so it can't be all bad.

So the day arrives and I go to my local NPR station to use their studio and the night before several friends warned me about it (the credit guy tweeted the shit out of our upcoming clash on NPR). We probably talked all together for maybe 20min and I got to say about four things (pretty much all of it appears in the final edit) while the credit shill guy talked over me, cut me off, refuted everything I said, and basically treated the interview like it was a business news show on Fox or CNBC where everyone is yelling at each other. At the end of it, the host Tess asked what I thought about it and I said it sucked, I never got to say anything and the few things I did say were refuted with strawman arguments and spurious reasoning. Tess agreed that I didn't get to say much and we ended up talking for another 10-15min and it was really great because she defended me to the credit guy and mentioned a total bullshit charge she got 7 years ago that tanked her credit as well. As I put down my headphones, the audio engineer guy working at OPB said something like "damn, that guy was a total bastard to you."

I was super pissed when I left the studio, I felt like I got ambushed by an industry shill that is highly trained on his talking points and does this kind of thing daily on TV. I tweeted to the show saying I regretted doing it and I thought it was a terrible format for NPR to follow. A friend told me that it sounded like grabbing any random geek off the street and having him or her go up against a life-long famous creationist to discuss evolution. Sure, you're in the right, but you're going to be blasted by the media pro that is trained to attack opponents with bullshit.

A day later the people that run the show responded on twitter and said to wait until it comes out and it wouldn't be as bad as I thought. They held off running it for the past few weeks and the thing I linked above is the bit of the show of us talking but it's heavily edited to sound better than my memory of it.

I'd link to all the relevant twitter posts about this but twitter's search is shit and I can't find anything I said more than a day ago so that's the story with the story.

No matter what that industry shill says, credit scores are still pretty much bullshit but they're so important to him and his industry that they'll say and do anything to keep people guessing and following them. I'm pretty much done with credit so I don't really care anymore but I still find it crazy that my score keeps declining as I practice better spending and savings habits.
posted by mathowie (staff) at 10:29 PM on September 23, 2011 [111 favorites]


Just reading the transcript without having known any of the back story, you came across as perfectly sensible and the industry guy came across as a sleazy shill ("BUT IT'S NOT THE *REAL* FICO SCORE!!!"). Good for you for putting yourself out there.
posted by auto-correct at 10:45 PM on September 23, 2011 [4 favorites]


Yeah, from reading the transcript, the other guy really comes off as an aggressive salesman.

However, the important thing to read in that article is the photo caption. Hard hitting journalism.
posted by demiurge at 10:49 PM on September 23, 2011 [5 favorites]


I know they meant "superfamous", but "hyper-prominent" is a term I might use to describe a nerd's Adam's apple. It is not how I think of mathowie.

No offense, Matt.
posted by That's Numberwang! at 10:54 PM on September 23, 2011


Geez H. Christ Matt!! My credit score is 640 which (according to the article) is only like 50 points behind yours. And , get this, I've been living in poverty (or close to it ) for about 9 years now. What the hell???
posted by Poet_Lariat at 10:59 PM on September 23, 2011


the important thing to read in that article is the photo caption.

A woman is confused? WTF?
posted by Devils Rancher at 11:10 PM on September 23, 2011 [3 favorites]


A woman is confused. (iStockPhoto)
posted by roll truck roll at 11:23 PM on September 23, 2011 [2 favorites]


Oops.
posted by roll truck roll at 11:24 PM on September 23, 2011


Yeah my first thought was that I didn't know Matt was hyper-prominent. Prominent? Sure. But hyper?

Eh, he always seems pretty chillaxed to me.
posted by IndigoRain at 11:38 PM on September 23, 2011


Matt, credit scores are bullshit.

When I quit working for a savings & loan in 1999 credit scores were just becoming popular. However, the company I worked for generally ignored them and looked at the whole credit package. A couple 30 day lates, even a 60 or 90 day late wasn't a reason to deny someone a mortgage.

That said, because you have closed accounts and are using cash, you're not showing credit companies that you're a good risk. The result is a lower credit score. The truth is, of course, that you're a great risk. The lender I worked for would have been thrilled to have you as a customer.

As long as you keep paying what credit you do have (mortgages, car loans, etc.) on time, I wouldn't worry about your score.
posted by deborah at 11:58 PM on September 23, 2011 [1 favorite]


My understanding was that a FICO score was more like a method of calculating scores, used by Equifax, Experian, and TransUnion, and that in fact lenders do care about and use those scores from those companies which generally are pretty much the same. They are where you get your FICO score from.

So I don't even understand what this asshole is saying. Is some company named myFICO.com trying to muscle into that territory and create some kind of brand confusion?
posted by fleacircus at 12:34 AM on September 24, 2011


Credit scores are BS. Companies need to figure out a better way to assess risk, this shouldn't be the only tool they use, it's very arbitrary and doesn't really paint a complete picture.
Good on Matt for raising his voice on this.
posted by arcticseal at 12:54 AM on September 24, 2011


VIGELAND: But then basically, again, that is an argument for having more cards.

ULZHEIMER: I would suggest it's an argument to not have credit card debt than it is to have open cards.


That's just dumb. Say I have two credit cards, each with a $5000 limit, and one of them has $2500 on it. I'm at 25% utilization. If I close the one with no debt on it, I'm at 50% utilization. That is, I increase my utilization and get penalized, but I have exactly the same amount of debt. So no, it isn't an argument "not to have credit card debt", because percent utilization is not directly sensitive to the raw amount of debt you have.

Given that credit is essentially effortless to obtain in the US, you can just get another credit card to decrease your percent credit utilization. Of course, this is exactly what they want you to do, because it increases the expectation that you will use that credit, and thus, they will make money.

Also, loved the "Oh, but you weren't looking at this number you've never heard of. No one uses that number." But if you go to freecreditreport.com, Experian says this:

"Lenders and insurers use several different credit scoring models so don't be surprised if your lender gives you a score that´s different from the PLUS Score you receive online. Just remember that your associated risk level is generally the same even if the number is not."

So Ulzheimer was just dodging. Presumably he knew this, and was just trying to obfuscate the core issue.
posted by Philosopher Dirtbike at 2:23 AM on September 24, 2011 [4 favorites]


We also talked a bunch about credit card fraud and how I closed my longtime cards because I didn't want to have 5 open credit accounts I no longer used that could be prone to number stealing and frivolous charges (it has happened twice to me in the last 15 years). That's how we eventually talked about closing accounts lowering my score, but they left it out because he got another weird crack in about how ATM/Visa cards supposedly offered no consumer protection but in my experience my bank reversed all charges instantly when some eastern european purchases suddenly appeared out of the blue.
posted by mathowie (staff) at 2:49 AM on September 24, 2011 [1 favorite]


Mathowie is not our leader. He is our enabler.
posted by Decani at 3:27 AM on September 24, 2011 [2 favorites]


Somehow, I seem to think that we could make that asshole's life a little less pleasant if we put on our MeFi thinking caps about it.

I too had a terrible experience of being deceived by an NPR-produced show, having my words "edited" to make me say the opposite of what I actually said, and having them act like douchebags when I raised a protest after the show aired. For that reason, I have a policy of never, ever giving any NPR journalist the pleasure of a returned phone call or email.

NPR is bullshit. Nice Polite Republicans is putting it too generously. They are so afraid of the right wing cutting off their spigot (such as it is anymore) after the Breitbart episode especially that they bend over backwards to appear "fair" to conservative and right wing idiocy. Just like the rest of the media, where "balance" means "we have to let these crazy assholes dominate the conversation."

I personally won't even listen to NPR programming anymore. At least Fox News is up front about what they are.
posted by spitbull at 4:15 AM on September 24, 2011 [5 favorites]


Nice Polite Republicans is putting it too generously.

For Marketplace, certainly. It's sometimes on when I get off work and I find myself listening to it on the way home if I didn't bike that day. It has always been the worst NPR show I've heard - all the smugness and smile-in-the-voice unseriousness but none of the insight you sometimes get on other shows. I can't recall a single story that actually gave its subject the coverage it deserved. Honest. I keep giving it a shot and it always disappoints until I thank the gods for the local jazz station and move on. Sorry you had a bad experience there, Matt.
posted by mediareport at 4:31 AM on September 24, 2011 [1 favorite]


t how ATM/Visa cards supposedly offered no consumer protection but in my experience my bank reversed all charges instantly when some eastern european purchases suddenly appeared out of the blue.

Yeah, that's pretty much bullshit. The difference is that for credit cards, banks are required to cover the whole amount, but for debit cards banks don't have to cover the first $50, but they usually do anyway. Also, with debit cards you are floating the bank that money until the fraud is processed, while with credit cards you shouldn't really be experiencing any of that loss (except if you have a really low credit limit, like I did, and the guy went to 3 atms and withdrew cash advances right up to my $600 credit limit, and I couldn't use the card at all for a couple of days).

I don't usually give two braincells about credit scores, but I bought a house recently so I had to check all that. As far as I can tell, the only demerit on my credit score is that I only use 1 credit card with a sensible limit and pay it off at the end of each month - it looks like I have a high utilization, but I don't carry any money forward. If I doubled my credit limit, wouldn't that actually make me at a higher risk of not being able to pay off my credit card bills?

I think Haughey's exactly right - I AM a "risk" to the banks because I don't engage in behaviors that make them money.
posted by muddgirl at 5:29 AM on September 24, 2011 [7 favorites]


I could practically see Ulzheimer wiggling his fingers and flicking colored scarves around to distract and confuse me.

"A card that's open that's 10 years old is just as old as a card that's closed that's 10 years old." Yes, but so what? I realize my brain now has a "this guy is lying to me" mode, and this guy triggered it hard.
posted by benito.strauss at 5:34 AM on September 24, 2011


Somehow, I seem to think that we could make that asshole's life a little less pleasant if we put on our MeFi thinking caps about it.

That is not helpful. Don't do that.
posted by Horace Rumpole at 5:58 AM on September 24, 2011 [6 favorites]


Somehow, I seem to think that we could make that asshole's life a little less pleasant if we put on our MeFi thinking caps about it.

I wish we wouldn't. That's not the kind of place I want MeFi to be.
posted by benito.strauss at 5:59 AM on September 24, 2011


Matt, for what it's worth I think Ulzheimer comes off as ridiculous -- he manages to say absolutely nothing of substance during the interview. On the other hand, you sound reasonable as you point out the same questions we all have.
posted by Houstonian at 6:03 AM on September 24, 2011 [2 favorites]


Wow, I've been living outside of the US for over 10 years and in that time it seems the whole credit rating industry has developed into a huge racket with the goal of making sure consumers constantly have debt to keep those fees going to the credit industry.

Out of curiosity, I should check out my rating just to see how bad it is, since I have had little to no debt in the US in over a decade.

I wonder what kind of problems that could cause should I ever decide to move back to the US.
posted by chillmost at 6:21 AM on September 24, 2011


Just to be clear, I wasn't advocating harassing him. Just a nice robust discussion of why he's wrong, so Google searches show some pushback!
posted by spitbull at 6:23 AM on September 24, 2011


I've seen ask.me questions where people are encouraged to just pay wrong or disputed bills to protect their credit. What a great tool to coerce consumers into just paying up. Credit scores for credit are one thing, but credit scores used for hiring are terrible.
posted by theora55 at 6:28 AM on September 24, 2011 [2 favorites]


Man, reading that transcript pisses me off. That guy seems to have no idea what he's talking about - is he just a FICO shill? For example:
What is material is that no one item on your credit report drives your score to be whatever it is.
I mean, yes, this is technically true, I guess. But it's also obfuscation, because one thing CAN significantly affect your credit score. When you're at the higher end of the range (and, surprisingly, 690 IS the higher end of the range, since credit scores have a significant left tail), the difference between a 750 and a 690 could be one item, like a late payment or being on a joint account with a high balance.
posted by muddgirl at 6:52 AM on September 24, 2011


benito.strauss: "'Somehow, I seem to think that we could make that asshole's life a little less pleasant if we put on our MeFi thinking caps about it.'

I wish we wouldn't. That's not the kind of place I want MeFi to be.
"

Can we sick Something Awful on him instead then?
posted by adamrice at 6:55 AM on September 24, 2011 [1 favorite]


dear dear. fucking autocorrect.

I'm gonna call BS on that, autocorrect doesn't correct real words like "dear" and "d" is right next to "r".
posted by nathancaswell at 7:12 AM on September 24, 2011 [2 favorites]


That's just dumb. Say I have two credit cards, each with a $5000 limit, and one of them has $2500 on it. I'm at 25% utilization. If I close the one with no debt on it, I'm at 50% utilization. That is, I increase my utilization and get penalized, but I have exactly the same amount of debt. So no, it isn't an argument "not to have credit card debt", because percent utilization is not directly sensitive to the raw amount of debt you have.

THIS. I actually said WTF out loud. That guy came across as an ass.
posted by pointystick at 7:28 AM on September 24, 2011


This is amazing. We've been struggling with this at my house because even though we have been working on credit improvement for years and have scores around like Mathowie's, we're looking for apartments and finding that landlords think our score isn't good enough. It's amazing.

Matt, have you posted your comment or a version of it on the Marketplace article comments?
posted by Miko at 7:31 AM on September 24, 2011


I actually think the interview came off just fine and the guy sounded like what he was, a shill. I do wish they had pulled enough of a credit history to make you a real case study, though, mathowie. That would be a powerful story and somebody ought to do it, but it'll take more research than an interview format. Maybe a print version? Maybe an investigation on Get Rich Slowly?
posted by Miko at 7:36 AM on September 24, 2011


While I'm sure that was a very frustrating experience, and god I hate the Hardball tacctic of sticking two "opponents" in a room, letting them shout it out, and calling it news, but Matt, reading the transcript, you come across as totally sticking it to The Man.
posted by Devils Rancher at 7:39 AM on September 24, 2011 [1 favorite]


I also forgot to mention one key aspect was when my credit score went from 700 to 690, I officially dropped down to a "medium credit risk" where everything over 700 is a "low credit risk" and while I'm ok with my house and won't be buying cars anytime soon, hearing that credit scores affect hiring and car insurance rates is kind of messed up so I can't totally abandon this, but then again by not abusing credit cards I'm not doing myself any favors.

The shill guy's point through our whole exchange was that everyone should have a ton of credit for a very long time BUT ONLY USE IT RESPONSIBLY which is like telling people to have ten guns in the house but make sure you're really sure it's an intruder when you squeeze the trigger.
posted by mathowie (staff) at 7:50 AM on September 24, 2011 [6 favorites]


Last time the financial industry relied on simple scores to sum up complicated situations it all worked out just fine.
posted by memebake at 7:50 AM on September 24, 2011 [4 favorites]


Ulzheimer: Yeah. We identified issue number one, which is that all of the advice that Matt was given was being given to improve a credit score that A. has zero relevance in the world of financial services. No lender uses it, no insurance company uses it.

Bull. Shit. I worked for a couple of years for a company that did nothing but provide credit decisions to smaller banks, insurance companies, cell phone providers, and car dealerships. This was, admittedly, quite awhile ago, but what we did was simply pull numbers from the three credit bureaus, get an averaged number, and then deal with borderline cases.

Borderline cases were cases that were just below the pre-set averaged scores that our clients told us was a "no" to them. These were rare cases, since most clients had firm numbers on "yes" or "no."

The idea that you can put a note on a bad credit report and anyone will care about it? Bullshit. These scores are plain numbers that most institutions don't even care to see. They'll open your report and "explain" some of your information if you insist, but it's entirely a "red" "yellow" "green" style of decision-making.

Credit bureaus piss me off, and the thing that bothers me the most is that these are private institutions making life-changing decisions based on things that they don't inform the public about.
posted by xingcat at 7:50 AM on September 24, 2011 [1 favorite]


Reading this led me to worry that the credit score estimates I've been getting from CreditKarma might be off. So I found MyFico which will give you a free glimpse at your score with a 10-day trial membership, which you can cancel before it transitions to a paid account. They say they'll send an email to remind you before it transitions but I also put a reminder in my calendar. As it turns out, the FICO is spot on in agreement with the CreditKarma estimate.
posted by Miko at 7:53 AM on September 24, 2011


Good job Matt!

I've been struggling with this as well. I've been trying to get my credit score up for the last 5 years, it having been trashed as a byproduct of divorce and all that led to it, and came after it, including tax liens.

Despite much effort, I'm still below 640, which makes it difficult to get decent rates on loans. I have little debt, one low limit credit card, have the same employer for over 25 years, make decent income, and all my accounts have been paid on time for years. But my jobless college student daughter has a better credit score than I do!

Sidenote: use AnnualCreditReport.com. It's the official government site that doesn't try to sign you up for paid stuff. (although the credit reporting agencies they link you to will)
posted by The Deej at 8:03 AM on September 24, 2011 [3 favorites]


I also use annualcreditreport.com but IIRC it doesn't give you your exact score, nor do the three reporting agencies you access through their links. It does show your exact account detail, though, which is great.

Let me know if that's changed but last time I looked it didn't include your numeric score, just the range you are in.
posted by Miko at 8:17 AM on September 24, 2011


Correct Miko. Myfico.com is the place for scores. AnnualCreditReport.com is the link to get your full credit reports for free once a year.
posted by The Deej at 8:19 AM on September 24, 2011 [1 favorite]


I actually saved all the info from MyFico and then closed the account immediately. It was no problem.
posted by Miko at 8:23 AM on September 24, 2011


I was going to drop them a comment to fix the istockphoto caption, but this is what they want filled out to send them a comment. I'm surprised penis size wasn't a required field.
posted by cjorgensen at 8:27 AM on September 24, 2011 [2 favorites]


Given the kinds of comments on other news sites I'm not surprised they want to control the inflow.
posted by Miko at 8:31 AM on September 24, 2011


As long as they don't ask for a credit score, I guess I can fill that out and post a comment.
posted by koeselitz at 8:32 AM on September 24, 2011 [1 favorite]


All I can say is that I totally agree with Matt, being LIVE on any medium is a dangerous proposition unless you're inside that world.
posted by fake at 8:38 AM on September 24, 2011 [2 favorites]


I think that was for the contact them, not to comment, but it could be the same form. I preferred to try to be nice and send them an email instead of the comment on the site that says, "You have something messed up." I hate those.

he got another weird crack in about how ATM/Visa cards supposedly offered no consumer protection

Dave Ramsey says that's not true.
posted by cjorgensen at 8:38 AM on September 24, 2011


what we did was simply pull numbers from the three credit bureaus, get an averaged number, and then deal with borderline cases.

Just to clarify, though. As I understand it, the CBs are repositories of data: accounts, lates, etc. They then license the right to analyze that data using a scoring algorithm developed for them by FICO. (I'm not sure if it's the same one or unique ones developed by FICO for each Bureau.) So my guess is that you pulled the *FICO* score from all three bureaus.

But there's market competition going on. The Credit Bureaus would like to stop paying FICO to license that algorithm. They'd like lenders, consumers, etc. to be paying them instead of FICO when checking a score. Matt pulled a score done by one of FICO's competitors. Competition may be getting tougher, as the three bureaus have banded together to create something called VantageScore. I would guess that a big part of this guy's job is to persuade everyone that FICO is the only real score and uniquely correct.

Someone please correct me if I'm wrong here. All my info comes second-hand via personal finance blogs, and there may be some Mefites closer to the industry.
posted by salvia at 8:41 AM on September 24, 2011


Just to clarify, though. As I understand it, the CBs are repositories of data: accounts, lates, etc. They then license the right to analyze that data using a scoring algorithm developed for them by FICO. (I'm not sure if it's the same one or unique ones developed by FICO for each Bureau.) So my guess is that you pulled the *FICO* score from all three bureaus.

If it was the FICO score, what accounts for the dramatic difference between the three bureaus? They were often very different, depending on which bureau we were looking at. In fact, the discrepancies between the three bureaus is one of the reasons I distrust credit scoring on principle. If this is an objective accounting of "credit worthiness," then all three bureaus should agree, or at least be close. Many times, it was like seeing the reports of three different people.
posted by xingcat at 8:52 AM on September 24, 2011


(And, to clarify, when looking deeper into people's accounts, it was almost always the exact same information that was being "analyzed.")
posted by xingcat at 8:53 AM on September 24, 2011


being LIVE on any medium is a dangerous proposition unless you're inside that world.

I've also found that being live is less problematic than being taped live but then re-edited so that you have all the downsides of live without the upsides. I'm often surprised at the way a 20 minutes phone call can be edited into five ten second sound bytes leaving me thinking "I didn't say any of that. Did they just misunderstand me or does this just make better radio?" Add to this that complicated/controversial topics and/or topics where some people have vested interest and other people are playing the "keeping it real" card are extra minefield-y.

That said, willingness to go on the record as saying "this system is badly broken and here's why" is a very very important role to be playing. It's tough to come across as sounding not like a wingnut when what you're saying is that there is a systematic problem with a system that is deeply ingrained in our society, but sometimes you have to step up and say just that. I think you did well, Matt.
posted by jessamyn (staff) at 9:15 AM on September 24, 2011 [15 favorites]


I did a live radio/videocast that was about my site. Listeners typed questions online that went were on the website. It was a lot to keep track of. One of the questions completely flummoxed me. I was asked about any legal cases my site was involved in and I had no idea if I was allowed to talk about them. I also was on a pain med that caused drymouth. Ugh! I did radio for 4 years as a college student and had no problems on the other side, nut being the person that was answering the questions and not the one asking is a different game.
posted by cjorgensen at 10:15 AM on September 24, 2011


Philosopher Dirtbike: "
"Lenders and insurers use several different credit scoring models so don't be surprised if your lender gives you a score that´s different from the PLUS Score you receive online. Just remember that your associated risk level is generally the same even if the number is not."

So Ulzheimer was just dodging. Presumably he knew this, and was just trying to obfuscate the core issue.
"

fleacircus: "So I don't even understand what this asshole is saying. Is some company named myFICO.com trying to muscle into that territory and create some kind of brand confusion?
"

myFICO is owned outright by Fair Issac. Experian offers the PLUS score, and refuses to allow consumers access to a FICO from them. This is essentially two middlemen trying to squeeze the other out. I understood this Ulzheimer guy as saying that the *other* score matthowie was using could totally be off base, and possibly only as close as it was because the two lines just happened to intersect recently.

Are credit scores bullshit? I guess it depends on what you mean. They're deliberately obfuscated, non-linear and increasingly used against you. And like most things on blogs, all the advice you'll find second hand knowledge with little critical thought applied. Even myFICO seems full of shit looking at the advice on my score. On the other hand, they seem to predict outcomes. On that front the people who underwrite insurance and loans simply don't give a shit if you understand how it works, just like how it doesn't matter how great a driver you are, as long as you have a penis, unmarried and under 25, you're paying more for car insurance. If a series of closed credit cards has correlated in the past with defaults, you get lumped in there. But it's only a part of underwriting, as anything Americans think of as 'good debt' is once again underwritten with down payments, net worth, income stream and good old fashioned racism.*

And it's only going to get worse. Over time we should see more scoring algorithms, above and beyond just competition entering the market to unseat the FICO monopoly. You see, the idea that there should be a credit score is absurd. The type of loan you have seems like it should affect default rates--you're far more likely to default on your credit card debt earlier than your home. Which means that these lenders should probably be using separate algorithms for underwriting. We already have car insurance using separate different FICO score.

* Just knowing your credit score might actually help out if you're a minority which receives unfair treatment. If your score is excellent and the lender you speak with in person is only offering subprime rates, you have plenty of evidence to walk.
posted by pwnguin at 10:33 AM on September 24, 2011 [2 favorites]


Of course this will all resolve itself in a couple years as most Americans probably won't be able to afford to but their own credit score let alone a new car or a house. The economy is collapsing from greed and the FICO shuffle is just one of the many small ways the greedy are trying to extract the last few cents from you that they can.
posted by Poet_Lariat at 11:03 AM on September 24, 2011 [1 favorite]


I'd reccomend anyone tickled by this to visit myFICO and do their fre trial. You can literally cancel right after you view the report -- it says it's an email to customer service but as soon as I typed in the order number and hit submit it said it was cancelled.

The whole thing is amusing in its disconnect from what you would think is rational -- "I'm not going to use this credit card anymore! Woo hoo! It's 0 balance and I'm cancelling it" means you're being responsible, right?

Well, they more or less say this on the myFICO report while you're reading it, the FICO score is your willingness to play the game. So by closing the account you're not playing anymore, so you get punished. Amusing world....
posted by cavalier at 11:39 AM on September 24, 2011


So it looks like it is left to me to address the false dichotomy elephant in the room; to wit, although mathowie was teasing Marketplace, it is still possible that eamondaly is crazy. Sorry, eamondaly. Matt's credit score simply isn't high enough to rule that out.
posted by It's Raining Florence Henderson at 11:41 AM on September 24, 2011 [1 favorite]


If it was the FICO score, what accounts for the dramatic difference between the three bureaus?

(A) They don't always have the same data,
(B) "(I'm not sure if it's the same [scoring algorithm] or unique ones developed by FICO for each Bureau.)"

But I'm not here to be an apologist for credit scoring. My main point was that some of that guy's statements made more sense to me when I remembered that FICO was trying to keep its competitors' algorithms out of the game. Not only can they not vouch for the other algorithms, they wouldn't want to; they'd want to portray them as wrong.

It'd have been better if the radio show had included a PR rep from the company that produced the scores that Matt had been tracking over time. But they invited someone from a different company onto the program. That guy had some easy outs: "he's not comparing apples [FICO scores] to apples," and "his orange to orange comparison probably just proves that our competitors suck."

I agree with Matt's fundamental point and wish the radio show had not enabled an industry PR person to have an easy out. Let's hear someone from Experian's tracking service explain why their algorithm reduced Matt's credit score over time.
posted by salvia at 12:00 PM on September 24, 2011


willingness to go on the record as saying "this system is badly broken and here's why" is a very very important role to be playing. It's tough to come across as sounding not like a wingnut when what you're saying is that there is a systematic problem with a system that is deeply ingrained in our society

Also this. I'd love to see more attention to how bogus this is.

The evolution of credit bureaus and scoring over time is actually kind of interesting. If I remember right, there was also an interesting civil rights / racial prejudice aspect to the story. It might make an interesting FPP if anyone wants to use their Saturday (early Sunday / late Friday) that way.
posted by salvia at 12:04 PM on September 24, 2011


No matter what that industry shill says, credit scores are still pretty much bullshit but they're so important to him and his industry that they'll say and do anything to keep people guessing and following them.

Metafilter: Did you really think we weren't preparing with personal bunkers for the revolution?
posted by hal_c_on at 12:50 PM on September 24, 2011


I agree with people here who think the guy came off as a shill trying to shovel bullshit while Matt sounded totally reasonable and right not to accept it. I think most people listening to this would see that clearly. It sucks that the process was such a pain in the ass for you, but I think you did a good thing here, Matt.

They should have left the part about credit card fraud in, though.
posted by homunculus at 12:57 PM on September 24, 2011 [1 favorite]


I think Matt came across very well while Ulzheimer came across like Nathan Thurm, just reading the transcript.
posted by TedW at 1:14 PM on September 24, 2011


Thanks pwngwin; the 3 companies trying to muscle out Fair's shitty product with their own shitty products might have been a good bit of info for some kind of informative radio show.
posted by fleacircus at 1:46 PM on September 24, 2011 [1 favorite]


fleacircus: "Thanks pwngwin; the 3 companies trying to muscle out Fair's shitty product with their own shitty products might have been a good bit of info for some kind of informative radio show"

Its been covered on this show (Marketplace Money) in the past. The one I remember most vividly was with Suze Orman as a guest, but I guess they did a followup.
posted by pwnguin at 3:03 PM on September 24, 2011 [1 favorite]


I can't stand Marketplace Money. Way too much victim blaming and kid glove treatment for wrongheaded industry practices. Too often the answer to someone's problem is that it's the little guy's fault because he didn't do his "homework" thoroughly enough. As though financial obfuscation is just the natural order of the universe, as unstoppable as rain and if you're carried off by a flash flood, well, you shouldn't have left your umbrella at home.
posted by marsha56 at 3:23 PM on September 24, 2011 [8 favorites]


I don't understand why people have to jump through so many hoops to access something that, if it's actually as important as it's made out to be, should be their absolute right to access free of charge. Paying for a sort-of-accurate credit report is like paying to find out your own phone number, minus a digit here or there.

The fact of the matter is that credit scores are bullshit. They serve no useful purpose except to make credit seem like a good and necessary part of everyone's life, which it is not, at all, ever. Having a credit card and paying it off in full every month just to keep your credit rating up is a completely useless exercise that doesn't serve you at all.

You're much better off saving up--collecting interest!--for big purchases and paying all at once than putting it on plastic and paying interest just so you can have something (which, let's face it, you probably wouldn't even buy if you had to save up for it) right now. But the banks don't make much money that way, so, uh, you'd better be a Responsible Adult® and keep that credit rating as high as you can!
posted by Sys Rq at 5:01 PM on September 24, 2011 [2 favorites]


(Oh, and to get back to that first paragraph: Why the hoops? So they have something else to charge you for.)
posted by Sys Rq at 5:03 PM on September 24, 2011


I leased a house just this week and was embarrassed to tell the prospective landlord that my credit score was probably not great. He asked why and I told him that I have no credit cards or loans. He was concerned and asked what I would do for an emergency. I told him that I have a savings account designated for emergencies. I got the house. Screw FICO!
posted by kamikazegopher at 5:48 PM on September 24, 2011 [3 favorites]


Having a credit card and paying it off in full every month just to keep your credit rating up is a completely useless exercise that doesn't serve you at all.... You're much better off saving up--collecting interest!--for big purchases and paying all at once than putting it on plastic and paying interest just so you can have something

Why pay in cash when I can get 1-3% cashback on a card? Unless the vendor offers a cash discount, which is vanishingly rare. I've never, ever carried a balance on a credit card, and therefore I've never paid interest. In other words, I do save up--collecting a miniscule amount of interest nowadays--for big purchases, but I pay it all at once on a card.

Of course, that cash back is coming out of merchant transaction fees, which means higher prices. So essentially you all are paying a tax, distributed to me...
posted by muddgirl at 6:04 PM on September 24, 2011 [4 favorites]


Well, Dave Ramsey says no one ever made millions on credit card rewards.

People who use credit cards tend to spend more per transaction than those who don't. It's psychology.
posted by cjorgensen at 6:27 PM on September 24, 2011


I just bought 38 Amazon gift cards (for me, my sister and my dad's cats) and two round trip tickets to CA (for my sister) because my father died with 200,000 "miles" or whatever the hell they are. I'm a slave to my own anti-debt fetishism so much that I'm not even sure what I'll buy with them. It's really its own weird problem. For people who are decent at paying off credit cards every month, there's not really a downside other than the big brother aspect, if that concerns you. I'm sort of happy to no longer have to carry big chunks of cash around for big purchases. Remember when you had to travel with a shit ton of traveler's checks? I do not miss those day, but I am not sure I always prefer these days either.
posted by jessamyn (staff) at 7:00 PM on September 24, 2011 [4 favorites]


love NPR and support The Sound of Young America on PRI and NPR stations

I should probably force myself to stop doing this since it's been, uh, like ten years since I worked in public radio, but just a quick primer:

National Public Radio, Public Radio International, and American Public Media are all mutually independent producers and distributors of public radio content. NPR and PRI have no involvement in running actual stations, APM is run by American Public Media Group, which also runs Minnesota Public Radio, Southern California Public Radio, and Classical South Florida.

Actual public radio stations are largely independent non-profit entities that are generally member stations of all three entities above. Marketplace is produced and distributed by APM. Sounds of Young America is independently produced and distributed by PRI. NPR hasn't got anything to do with this particular story.

Sorry, pet peeve. I could also share all sorts of incestuous inside politics about the relationship between PRI, Minnesota Public Radio, and the American Public Media Group, but I'll spare you.
posted by nanojath at 7:18 PM on September 24, 2011 [14 favorites]


nanojath, I would totally read your essay/blog post about public media.
posted by not that girl at 7:25 PM on September 24, 2011 [9 favorites]


Yeah, I would totally subscribe to that newsletter! Just change industries if you're worried about stepping on anybody's toes. Fast-food franchising, say.

Matt was fine, but the episode was crap. They weren't even trying, this seems like just a way for PRI/NPR/whatever-they're-kinda-the-same to go "herp derp blog money talk INTERNETS let's see what's going on guys."

"Well there you have it everybody, I hope you got something out of it. See you next time."
posted by rhizome at 8:38 PM on September 24, 2011


Totally in favor of nanojath doing an FPP about public radio.
posted by spitbull at 9:35 PM on September 24, 2011


nanojath's remarks are well-taken. In my experience, Marketplace is probably among the most pedantic and ill-researched programs that appears on public radio (up there with Talk of the Nation), which really bristles me. You should not let your feelings about Marketplace tinge whatever feelings you have about Morning Edition and All Things Considered, both of which have their own issues with objectivity and coroporatism. If you're looking for better public radio news alternatives, MeFi favorite Planet Money (NPR) is great for financial news, and PRI's news programs (Takeaway in the morning, Here & Now during the day, The World during the evening) are also top notch.
posted by Apropos of Something at 9:51 PM on September 24, 2011 [2 favorites]


Are the participants granted an unedited recording of the conversation by some obscure contract or wiretap or whatever law somewhere?

Are participants in NPR "conversations" such as this permitted a declared personal recording device?
posted by crysflame at 11:36 PM on September 24, 2011


I could also share all sorts of incestuous inside politics about the relationship between PRI, Minnesota Public Radio, and the American Public Media Group, but I'll spare you.

Hooray, a spare! It's not as many points as a strike, but it's still an awesome story the next day.
posted by crysflame at 11:39 PM on September 24, 2011


I listened to this yesterday without catching who the individuals were until the very end. Even without the pro-MeFi, anti-FICO bias I would have had if I known, it was still glaring that the FICO shill was answering reasonable questions with slippery language and obfuscation. In fact, my main feeling was that I was disappointed that the segment was so completely uninformative despite the good idea of basing it around a specific, clear, yet generalizable case. The only thing I took home is that the arcane, whimsical nature of credit scores is apparently absolutely intentional and the powers that be have no interest in making that better. I'm glad that Matt's out there making points that need to be made, and I hope that next time it's picked up by a better show.
posted by Schismatic at 5:48 AM on September 25, 2011


Well, Dave Ramsey says no one ever made millions on credit card rewards.

If that's our metric, I don't think anyone has "made millions" by sticking a couple thousand dollars in a traditional savings account at 0.8% APY. Ramsey certainly didn't make his fortune that way.

People who use credit cards tend to spend more per transaction than those who don't. It's psychology.
When people confronted the detailed reality of expenses, it no longer mattered whether they used cash or something else, the scientists conclude.
There are few real-life situations where you aren't looking at the "detailed reality of expenses" - home improvement projects, perhaps. Furthermore, many people report that cash burns a hole in their pocket.
posted by muddgirl at 6:27 AM on September 25, 2011 [1 favorite]


I know I am a lot more impulsive with plastic than I am with real cash, but am willing to concede it could just be me.
posted by cjorgensen at 6:41 AM on September 25, 2011


I don't think it's "just you" - clearly some people have a problem using credit or debit cards, but that doesn't mean that everyone has a problem using credit or debit cards. I don't really believe in universal precepts like "cut up all your credit cards," or "credit cards are always a better idea than using cash." Both of those are too simplified.
posted by muddgirl at 9:53 AM on September 25, 2011


muddgirl: "There are few real-life situations where you aren't looking at the "detailed reality of expenses""

For a lot of people, as long as everyone gets paid, there's no incentive to plan & budget. Even if you end up living paycheck to paycheck.

The study you cite (Monopoly Money: The Effect of Payment Coupling and Form on Spending Behavior) is a fairly good argument for planning, and in fact if you look at figure 2, it's a pretty good case that credit helps. But I like to give papers a bit of push back:

* it's a classroom exercise, rather than an examination of behavior in situ. participants can't comparison shop or even refer to past spending behavior.
* The sample is all undergraduate students in an intro to marketing class. how many have them have bought thanksgiving dinner before? 20-32 dollars per person for a home cooked thanksgiving dinner?
* fig 2 has a funny y axis which magnifies the effect visually
* even the authors don't know why the effect was reversed for planning and think it's BS
* a detailed plan costs time to come up with, so you could end up working for less than minimum wage by planning
posted by pwnguin at 11:07 AM on September 25, 2011


I use cash so rarely that it's kind of a non-distinction for me; the only decision I make is whether I actually want to specifically use my credit card for a large purchase to avoid emptying out the checking account that most of my autopay stuff and my debit card comes out of, or to do credit transactions with online retailers.

But I sort of grew up with the lesson (not necessarily by example) of just being conservative with spending anyway. I've got one credit card with a modest limit, don't do a lot of impulse buying, and pay of my CC balance every month.
posted by cortex (staff) at 12:09 PM on September 25, 2011


Are participants in NPR "conversations" such as this permitted a declared personal recording device?

Well here's the thing. I'm fairly sure that I could have said "Hey I'm recording this conversation" any number of times that I've been interviewed. However I'm also sure that would seem like a "fuck you" move and the whole deal here really is that you are supposed to consider yourself lucky to get chosen by whichever Big Deal Media people have deigned to ask you your opinion. So there's the feeling, I think, that by treating them like they're in some ways potentially acting counter to your own interests, you're seen as crabby and paranoid and less likely to get asked to give your opinion in the future. So you have to think about the long game.

And there's something to that. Speaking as a crabby person who frequently has the "this whole system is totally fucked" perspective, I have to be sort of choosy about when I roll out the "talking about ebook licensing terms with publishers is like negotiating with terrorists" line (a recent one I was particularly pleased with) and when I'm more diplomatic even if it comes with the downside of either being misquoted or having my true feelings get dissipated in feelgood rhetoric.

I know this is a little off-topic but I once had a letter printed in the NY Times magazine. This got me a lot of exposure and it was clearly read by a lot of people. That was good. The downside was that I had originally written them because they'd used content from my website without permission and I was pretty annoyed. They offered me the option of writing a letter to sort it all out. The letter was edited significantly including manufacturing from whole cloth the opening sentence about how "thrilled" I was to have my content in the NY Times magazine. So people who have ideas that they want to get out there have to baance short term and long term gains for whatever their ideas are. A lot of people get exasperated at this sort of dance and just give up which I think is too bad, no matter what their ideas were to begin with.
posted by jessamyn (staff) at 12:39 PM on September 25, 2011 [5 favorites]


The Takeaway really is a good show. It's one of my new favorites. It has all the casual, informal, tell-it-like-it-is tone and banter that some lesser attempts at making the news more hep used to have, only it also has real substance, impressive research, timely topics, and good questioning strategies on the part of the hosts.
posted by Miko at 3:09 PM on September 25, 2011 [1 favorite]


...the whole deal here really is that you are supposed to consider yourself lucky to get chosen by whichever Big Deal Media people have deigned to ask you your opinion. So there's the feeling, I think, that by treating them like they're in some ways potentially acting counter to your own interests, you're seen as crabby and paranoid and less likely to get asked to give your opinion in the future.

It's not just "Big Deal Media people" either. Small town journalists can have this attitude as well, in spades. They'll act like by asking you to help them do their job, for free, they're doing you a big favour. I was working at a local shop when a television reporter called about coming in to do a short interview about how the frequent power outages we were having at the time were affecting our business. I told him that everyone who was there was pretty busy at
posted by ODiV at 3:49 PM on September 25, 2011


> I was super pissed when I left the studio, I felt like I got ambushed by an industry shill

I heard the piece this afternoon. You did just fine. Really.
posted by Short Attention Sp at 3:50 PM on September 25, 2011


the moment and maybe he could call back in an hour when the owner was due back. He replied, "I guess no one there wants to be on television !" and hung up.

Thankfully I don't work a job where media coverage is something I want or have to deal with. My stock response to any question by a journalist now is, "Sorry, I don't talk to the media," even for on the street opinion polls.
posted by ODiV at 3:54 PM on September 25, 2011


Speaking of personal recording during an interview, didn't M.I.A. do this for her interview for the New York Times?

Ah yes, here it is.
posted by ODiV at 4:08 PM on September 25, 2011


Ha, and I said the same thing about how I don't talk to the media in that thread as well. At least I'm consistent.
posted by ODiV at 4:20 PM on September 25, 2011


I have no idea at all what my credit rating is. It's just never been an issue. I got a credit card at 20 easily, and have never had a problem getting subsequent cards. I bought my first home at 27 and had no trouble getting a mortgage, nor did I have any trouble trading up to a more expensive home with an accompanying bigger mortgage at 33. I keep my credit cards paid off and have never had any other debt than my mortgage, which I am aggressively paying off. I've never owned a car but I've always assumed that if I should ever buy one I'd be able to get a loan if needed.

But things do seem to be changing. My sister, who is just 2.5 years younger than me, has had a completely different experience. She has always lived at home and paid cash for everything, and when she attempted to buy her first new car in her earlier thirties or so (having always driven my parents' old cars), she had trouble getting a loan for it even though she had a steady income and was prepared to pay most of the purchase price in cash. Apparently she had no credit rating whatsoever. My dad had to co-sign for her. Then she realized she should build her credit rating, so she got a credit card, and she had some difficulty getting that.

I'm definitely against too-easy credit. We've all seen what that's done to the housing market. But it does seem Matt is right and there are serious problems with the credit rating system and the way some companies assess the risk of loaning to their customers.
posted by orange swan at 7:21 AM on September 26, 2011


I know I am a lot more impulsive with plastic than I am with real cash, but am willing to concede it could just be me.

I'm sure it's not just you, but it doesn't follow that everyone is either. I find I'm actually more careful about what I put on a credit card, but that's due to my budgeting practices. I take $100 out of my bank account every month so I can have some money in my wallet, and I also allow myself a certain amount more in credit purchases. I then tend to think that $100 is already as good as spent, while putting purchases on my credit card is tantamount to taking more money out of my account.

I think knowing yourself is key here. Some people have zero impulse control and need to keep their credit cards frozen in a block of ice, or not have one at all. Other people are very disciplined. It's like keeping Ben & Jerry's in the freezer. Can you trust yourself to eat it at a sensible pace? Fine, keep your freezer stocked with it. Will you eat it all at once immediately? Then just buy it at planned intervals, for a treat.
posted by orange swan at 7:37 AM on September 26, 2011 [1 favorite]


Yeah, depends on the person. I spend more than I should generally, but am worse with cash than a credit card.
posted by ODiV at 9:23 AM on September 26, 2011


I tweeted #1 a link to Graham Linehan's ruminations on his confrontational Today interview.

I think the right tack to have taken in that NPR segment, once you knew the format, was to question the whole premise of the "debate", by going after the financial contortions that are recommended by professional credit score pundits/shills like Ulzheimer. What do they have to do with real behaviour? If they're supposedly objective algorithms based on risk, doesn't being told to do weird shit with utilization ultimately make the algorithms useless? Why should people have to chop off their financial limbs to fit a Procrustean bed marked "credit-worthy" -- or is the truth that those kinds of manipulations reveal the industry's preferred customers, not those who are the lowest risk?
posted by holgate at 9:45 AM on September 26, 2011 [1 favorite]


The other thing I was thinking about is this: I would grudgingly accept if this system was used by the credit companies, for the credit companies - because then you would understand that hey, if I want a credit card or a house or car loan, I have to play this game, because it's their game. What's really bothering me now is that prospective landlords are pulling our credit scores - it's become routine in this city - and they're also being used to make employment decisions. This just seems like serious creep, and I don't know if it's even been demonstrated that credit has a stronger affect on rental payments or employment prospects than any other personal category of information. We have absolutely flawless, glassy-perfect rental histories going back 20 years, and that doesn't seem to matter to prospective landlords as much as the late payment on my Macy's card from five years ago. That's just nuts, I think. And these very positive indicators don't get reported to credit agencies - nor do decades of regular, perfect phone and utility payments, all showing an individual's ability to keep their head above water.

I suppose the argument would be "well, if someone got in trouble with bad credit it could eventually threaten their ability to pay rent and utilities, and/or maybe put them at a higher risk for embezzling," but honestly, it really feels like an encroachment of private credit-scoring companies where they don't belong. The score has come to mean too much.
posted by Miko at 6:31 AM on September 27, 2011 [3 favorites]


Forgot to add a personal note: I tried carrying cash for a while on the theory I'd be more reluctant to part with it. Unfortunately, it's not a good system for me - not because I blow it, but because I don't track it as well. I can start out with $60 and end up with an empty wallet and receipts totalling only $38, because I didn't bother to get a receipt from a cab, the printer at the convenience store wasn't working, I bought something for cash from a street vendor, I threw money into a communal tab and never saw the receipt itself, etc. I basically try to do just about everything with my debit card linked to my checking account - I save all receipts and then check it against the bank log, which gives me a built-in double-checking method instead of wondering "OK, I withdrew $60, and what the heck did I spend $22 of it on?"
posted by Miko at 6:33 AM on September 27, 2011


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