Let’s Stop Praying to the Credit Score

Mortgage brokers, and those hoping to buy homes, are disgusted by the preeminence of the credit score in “scoring” a home loan today. According to an article, in Friday’s New York Times, this overemphasis on credit scoring in the home mortgage market is not helping the economic recovery either, because people just cannot qualify for a home. Some people’s scores have decreased even though they have done nothing differently. The author’s interesting article recounts many mistakes in his own credit report, a common phenomenon as it turns out. The author is so disgusted he thinks the CFPB ought to take up credit reporting and scoring as a high priority once it is up and running.

I agree that this is a shame, all this focus on credit scoring in lending, but I also think consumers can whip themselves into a frenzy over these scores, even when they do not want, need, or plan to use future credit. Always remember what the score is for, to qualify for more credit. Staying out of debt is as good a strategy as any for keeping the score high. Students acquire more credit cards than they need in order to get three open items. Before they know it, their scores are lower because they cannot pay. I know a terminally ill woman, with no job and no intention to take on any more credit. She wants to keep paying dribs and drabs on her enormous medical debts to protect her score until the end. Why? I hate to give these scores, and the agencies that create them, more power over us than they deserve.