Speaker 1: Let's say good morning now to the host of money
Speaker 1: on KFI. It's Joel lurs Guard morning Joel.
Speaker 2: Good morning Amy.
Speaker 3: I hear your sweating and at your son's swimming practice.
Speaker 2: Yeah, I am.
Speaker 1: Can we just talk to Yeah, we just talked to
Speaker 1: Courtney Donaho with Bloomberg. She's also in New York and
Speaker 1: said that she's just sweating to death, really hot.
Speaker 2: This heat wave is something crazy, isn't it.
Speaker 1: Okay, Well, the pool is the place to be, so
Speaker 1: glad you're there, But that doesn't prohibit us from talking
Speaker 1: about money. And I think this is very interesting for
Speaker 1: the people who are fans of the buy now, pay
Speaker 1: later trend.
Speaker 3: It could affect your credit score.
Speaker 2: Now, yeah, and you and I have talked about this
Speaker 2: a few times. By now pay later in general, and
Speaker 2: I'm not a fan of the proliferation. There are a
Speaker 2: number of companies now that allow you to pay for
Speaker 2: whatever you want under the sun, essentially in installments, from
Speaker 2: groceries to airplane tickets to grub hub. And it just
Speaker 2: it unsettle me every time I hear about BNPL, you know,
Speaker 2: wandering into a new way to pay for something random
Speaker 2: and yees. So now, but the part of the problem
Speaker 2: has been for lenders is as buy now, Pay Later
Speaker 2: has become this bigger segment of the market, well, lenders
Speaker 2: are saying, we don't know who we're lending to, and
Speaker 2: maybe they've got twenty six outstanding by now pay Later
Speaker 2: loans that they've paid late on and that would show
Speaker 2: that they don't handle credit terribly well, but that doesn't
Speaker 2: get reported to the bureaus. So it's really hard for
Speaker 2: them to know who is a good person to lend
Speaker 2: credit to, and who are to yeah to lend to
Speaker 2: make a loan to, and who's not and so yeah,
Speaker 2: finally we're starting to see the addition of buy now,
Speaker 2: Pay Later into the credit scoring models, and Fiico is
Speaker 2: really a leader here at Fico's like basically the biggest
Speaker 2: player in the credit scoring game, and they're going to
Speaker 2: start working with a firm we've seen a firm start
Speaker 2: reporting anyway to some of the credit bureaus. Standardizing the
Speaker 2: how this impacts credit scores has been the tough part,
Speaker 2: but it seems Fiico has the first robust model that
Speaker 2: they're going to implement.
Speaker 1: Okay, so I have a question about credit scores in general.
Speaker 1: Sure eight hundred used to be like the top that's
Speaker 1: that's as good as it could get. Well, mine's way
Speaker 1: over eight hundred. When did that change that nine hundred
Speaker 1: is the top score?
Speaker 2: Now, Okay, first, that sounds like a humble brag amy,
Speaker 2: which is fine. You can do that let people know
Speaker 2: how great you are. So that's just a retally good question.
Speaker 1: I've worked really hard to have good credit. But it's
Speaker 1: just it was never that high. And now I'm like,
Speaker 1: how did it get that high? I didn't I haven't
Speaker 1: done anything different.
Speaker 2: You deserve the credit. I want you to have that credit.
Speaker 2: But it just made me see what happens with credit scores.
Speaker 2: The thing is, there's there. There are so many of
Speaker 2: them it's not even funny. So some of them go
Speaker 2: up to eight fifty, some of them go up to
Speaker 2: nine hundred. I believe it's a TransUnion that use the
Speaker 2: scores up to nine hundred. And so every each bureau
Speaker 2: has different scoring models, and even underneath each bureau, like
Speaker 2: for instance, FCoS mentioning, which which credit scores. They're well,
Speaker 2: they're creating new credit scores and incorporate buy now, pay later.
Speaker 2: But some lenders might say, hey, actually we're still rolling
Speaker 2: with the FCO eight scores, and these are FICO ten
Speaker 2: T or whatever like they're they're renaming and adding different
Speaker 2: scores that these lenders can purchase in order to delve
Speaker 2: in and see, you know, the credit worthiness of potential
Speaker 2: of a potential borrower. And so these credit scores run
Speaker 2: the gamut. I would hold loosely kind of that number
Speaker 2: and just kind of a generally good credit score that
Speaker 2: that is going to be top tier to get the
Speaker 2: best rates on a mortgage or a car loan or
Speaker 2: something like that is going to be seven forty plus
Speaker 2: or seven sixty plus. If you're in that range, you
Speaker 2: don't need to sweat it, whether you know it'll be like,
Speaker 2: I gotta get it up to eight fifty, I gotta
Speaker 2: get perfect. To me that that pursuit of the perfect
Speaker 2: credit score is a waste of your time. Good enough
Speaker 2: is good enough, and again it is going to get
Speaker 2: you where you want to go. But I get why
Speaker 2: it's confusing, because there are just dozens of credit scores
Speaker 2: out there on you, many of which were not pretty
Speaker 2: too okay.
Speaker 1: And I will tell you that I can speak from
Speaker 1: firsthand that you are correct, because I went in just
Speaker 1: I can't even remember what it was.
Speaker 3: But I went in and I and I.
Speaker 1: Said, but I've got this really great credit score, and
Speaker 1: they go, huh, Like it didn't matter, like you said,
Speaker 1: once you get up to like seven forty seven sixty,
Speaker 1: that's like top tier and it doesn't make a difference
Speaker 1: really After that.
Speaker 2: Yeah, you're still going to get the best rates on
Speaker 2: loans that you might that you might be wanting to
Speaker 2: take out. One one place I like for people to
Speaker 2: go is is credit karma dot com. And if you
Speaker 2: go to credit Karma and you create an account, be
Speaker 2: aware they'll try to, like, you know, get your sign
Speaker 2: up for credit cards. We'll try to entice you to
Speaker 2: sign up for credit products because they're going to know
Speaker 2: a lot about you. But the cool thing is there's
Speaker 2: like credit score cards that you can you can tap
Speaker 2: into and you can see, Okay, what is harming my
Speaker 2: credit score? If I have a poor credit score, you'll
Speaker 2: be able to like see two of your credit scores
Speaker 2: recur credit. Your credit card company is typically going to
Speaker 2: have great credit information for you that's widely available. That
Speaker 2: wasn't the case twenty years ago, but it is now.
Speaker 2: So there's so many ways to kind of check in
Speaker 2: on your status. Hey, what's my credit looking like? How
Speaker 2: can I beef that up? How can I improve my
Speaker 2: credit so that I am getting the best terms when
Speaker 2: I do need to borrow?
Speaker 1: All right? And for lots more great financial advice, credit scores,
Speaker 1: whether you need college.
Speaker 3: And new cell phone plans. You can listen to.
Speaker 1: How to Money with Joel Larsgard right here on KFI.
Speaker 1: It's every Sunday from noon to two. You can also
Speaker 1: follow Joel how to Money at at at how to
Speaker 1: Money Joel.
Speaker 2: Thank you Joel, Thanks Amie, appreciate you.
Speaker 3: Stay cool.
Speaker 2: We'll do.
Speaker 3: That. Chance