Did y'all know this?
I grew up thinking that all these systems and all of these rules had been tried and proven and practiced for years.
Y'all, now I'm not even sure if they did the proper research before putting these systems into place.
Now, I will preface this blog post by saying, I am not a financial scholar by any means. In fact, I am terrible at money. It frightens me and I hate it. So what I write here is based on my own personal (non-expert) research and interpretation.
And you know what? I think that might be good, because it's mostly non-experts using the money systems anyways.
For reference, I was born in 1977, I'm 44 years old and money gives me more anxiety than almost anything.
Especially when it comes to any kind of credit.
There is very little that gets my heart racing and my puts sweating like waiting on a credit decision or, hell, even having a conversation about money with someone.
I immediately stumble over my words and can't form a sentence.
Wait, that's not different than any other conversation I have.
Whenever I talk about money, there is someone with a megaphone in my head yelling, "YOU ARE DUMB ABOUT THIS. JUST LET THE SMART PEOPLE TALK ABOUT IT. IF THEY NEED YOUR FEEDBACK, DO NOT GIVE IT. IT IS WRONG."
Or some variation on that tune.
So yeah, money is a scary subject for me.
Part of that is because I was never properly taught about it.
But also, was anyone?
All my life I thought the credit rating system was this big massive machine that had been in use for decades.
You know when the BEACON rating started being used? 1989.
I was 12.
Now, if you don't know this (which I did not until I started writing this), the BEACON rating is the Equifax version of the FICO scores.
WHO ON EARTH THOUGHT THIS WAS A GOOD SYSTEM FOR HUMANS?
I mean, the acronyms alone!
What does this mean?
Welp, (this is directly from wikipedia, because my brain couldn't reword it any better), "Each individual actually has over 60 credit scores for the FICO scoring model, as each of the three national credit bureaus (Equifax, Experian and TransUnion) has its own database, but the most used are 40. Data about an individual consumer can vary from bureau to bureau. FICO scores have different names at each of the different credit reporting agencies: Equifax (Beacon), TransUnion (FICO Risk Score, Classic) and Experian (Experian/FICO Risk Model)."
Fucking confusing AF, right?
So, also in case you didn't know, FICO scores weren't being widely used until 1995.
The year I graduated high school.
So my whole life, I've been held accountable to this baby of a system that everyone around me acted like had been around forever.
Let me go a little bit further back on FICO, though.
First of all, FICO stands for Fair, Issac & Company and was founded in 1956 by an engineer and mathematician.
It is a data analytics company and, two years after being founded, they sold their very first credit rating system.
In 1986, the company went public and, three years later, debuted their very first general purpose FICO score.
I was 9.
(Also, full disclosure, I'm using Wikipedia for my fact checking, because it reads the most straightforward for my neurodivergent brain. )
8 years later, the same year I graduated high school, Fannie Mae & Freddie Mac started using FICO to decide who was mortgage worthy.
Since then, FICO has acquired 21 other companies.
First off, I honestly didn't realize it was just, like, a money-making company grading our credit.
IDK why I thought this. I'm naive, I guess. I thought it would be an impartial agency, not someone who makes money offa us.
I was curious, so I looked it up.
Wanna know how much money FICO made last year?
According to Macrotrends.net, "Fair Isaac revenue for the twelve months ending March 31, 2022 was $1.352B, a 1.54% increase year-over-year."
1.352 BILLION. For scoring us.
Now, look, I said that I am no expert and I'm sure there is a ton of nuance I'm missing here.
But I dunno, I was just surprised to discover this little rabbit hole I fell into when I posted a meme the other day.
This is the meme.
Yup, you are reading this correctly. Women were not allowed to have credit cards of their own until 1974.
Three years before I was born.
And y'all ask us why we're terrified right now? It's shit like this.
To quote the great Jim Philips, "If you're not angry about something then you're not paying attention."
I think lots of people have said that, I just heard him say it, like, every day for over 10 years of my life, so I always relate it to him most.
In conclusion, I'm always up for learning about literally anything, so if you have more stuff about this topic you'd like to share or would like to fall down this rabbit hole with me, come on along! As long as you approach things as a learning experience and not a lecture, I'm on board! I love learning with people I love.