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<v Speaker 1>Let's say good morning now to the host of money

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<v Speaker 1>on KFI. It's Joel lurs Guard morning Joel.

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<v Speaker 2>Good morning Amy.

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<v Speaker 3>I hear your sweating and at your son's swimming practice.

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<v Speaker 2>Yeah, I am.

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<v Speaker 1>Can we just talk to Yeah, we just talked to

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<v Speaker 1>Courtney Donaho with Bloomberg. She's also in New York and

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<v Speaker 1>said that she's just sweating to death, really hot.

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<v Speaker 2>This heat wave is something crazy, isn't it.

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<v Speaker 1>Okay, Well, the pool is the place to be, so

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<v Speaker 1>glad you're there, But that doesn't prohibit us from talking

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<v Speaker 1>about money. And I think this is very interesting for

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<v Speaker 1>the people who are fans of the buy now, pay

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<v Speaker 1>later trend.

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<v Speaker 3>It could affect your credit score.

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<v Speaker 2>Now, yeah, and you and I have talked about this

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<v Speaker 2>a few times. By now pay later in general, and

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<v Speaker 2>I'm not a fan of the proliferation. There are a

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<v Speaker 2>number of companies now that allow you to pay for

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<v Speaker 2>whatever you want under the sun, essentially in installments, from

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<v Speaker 2>groceries to airplane tickets to grub hub. And it just

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<v Speaker 2>it unsettle me every time I hear about BNPL, you know,

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<v Speaker 2>wandering into a new way to pay for something random

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<v Speaker 2>and yees. So now, but the part of the problem

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<v Speaker 2>has been for lenders is as buy now, Pay Later

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<v Speaker 2>has become this bigger segment of the market, well, lenders

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<v Speaker 2>are saying, we don't know who we're lending to, and

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<v Speaker 2>maybe they've got twenty six outstanding by now pay Later

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<v Speaker 2>loans that they've paid late on and that would show

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<v Speaker 2>that they don't handle credit terribly well, but that doesn't

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<v Speaker 2>get reported to the bureaus. So it's really hard for

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<v Speaker 2>them to know who is a good person to lend

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<v Speaker 2>credit to, and who are to yeah to lend to

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<v Speaker 2>make a loan to, and who's not and so yeah,

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<v Speaker 2>finally we're starting to see the addition of buy now,

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<v Speaker 2>Pay Later into the credit scoring models, and Fiico is

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<v Speaker 2>really a leader here at Fico's like basically the biggest

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<v Speaker 2>player in the credit scoring game, and they're going to

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<v Speaker 2>start working with a firm we've seen a firm start

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<v Speaker 2>reporting anyway to some of the credit bureaus. Standardizing the

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<v Speaker 2>how this impacts credit scores has been the tough part,

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<v Speaker 2>but it seems Fiico has the first robust model that

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<v Speaker 2>they're going to implement.

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<v Speaker 1>Okay, so I have a question about credit scores in general.

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<v Speaker 1>Sure eight hundred used to be like the top that's

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<v Speaker 1>that's as good as it could get. Well, mine's way

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<v Speaker 1>over eight hundred. When did that change that nine hundred

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<v Speaker 1>is the top score?

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<v Speaker 2>Now, Okay, first, that sounds like a humble brag amy,

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<v Speaker 2>which is fine. You can do that let people know

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<v Speaker 2>how great you are. So that's just a retally good question.

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<v Speaker 1>I've worked really hard to have good credit. But it's

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<v Speaker 1>just it was never that high. And now I'm like,

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<v Speaker 1>how did it get that high? I didn't I haven't

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<v Speaker 1>done anything different.

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<v Speaker 2>You deserve the credit. I want you to have that credit.

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<v Speaker 2>But it just made me see what happens with credit scores.

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<v Speaker 2>The thing is, there's there. There are so many of

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<v Speaker 2>them it's not even funny. So some of them go

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<v Speaker 2>up to eight fifty, some of them go up to

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<v Speaker 2>nine hundred. I believe it's a TransUnion that use the

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<v Speaker 2>scores up to nine hundred. And so every each bureau

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<v Speaker 2>has different scoring models, and even underneath each bureau, like

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<v Speaker 2>for instance, FCoS mentioning, which which credit scores. They're well,

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<v Speaker 2>they're creating new credit scores and incorporate buy now, pay later.

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<v Speaker 2>But some lenders might say, hey, actually we're still rolling

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<v Speaker 2>with the FCO eight scores, and these are FICO ten

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<v Speaker 2>T or whatever like they're they're renaming and adding different

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<v Speaker 2>scores that these lenders can purchase in order to delve

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<v Speaker 2>in and see, you know, the credit worthiness of potential

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<v Speaker 2>of a potential borrower. And so these credit scores run

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<v Speaker 2>the gamut. I would hold loosely kind of that number

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<v Speaker 2>and just kind of a generally good credit score that

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<v Speaker 2>that is going to be top tier to get the

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<v Speaker 2>best rates on a mortgage or a car loan or

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<v Speaker 2>something like that is going to be seven forty plus

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<v Speaker 2>or seven sixty plus. If you're in that range, you

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<v Speaker 2>don't need to sweat it, whether you know it'll be like,

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<v Speaker 2>I gotta get it up to eight fifty, I gotta

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<v Speaker 2>get perfect. To me that that pursuit of the perfect

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<v Speaker 2>credit score is a waste of your time. Good enough

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<v Speaker 2>is good enough, and again it is going to get

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<v Speaker 2>you where you want to go. But I get why

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<v Speaker 2>it's confusing, because there are just dozens of credit scores

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<v Speaker 2>out there on you, many of which were not pretty

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<v Speaker 2>too okay.

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<v Speaker 1>And I will tell you that I can speak from

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<v Speaker 1>firsthand that you are correct, because I went in just

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<v Speaker 1>I can't even remember what it was.

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<v Speaker 3>But I went in and I and I.

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<v Speaker 1>Said, but I've got this really great credit score, and

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<v Speaker 1>they go, huh, Like it didn't matter, like you said,

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<v Speaker 1>once you get up to like seven forty seven sixty,

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<v Speaker 1>that's like top tier and it doesn't make a difference

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<v Speaker 1>really After that.

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<v Speaker 2>Yeah, you're still going to get the best rates on

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<v Speaker 2>loans that you might that you might be wanting to

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<v Speaker 2>take out. One one place I like for people to

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<v Speaker 2>go is is credit karma dot com. And if you

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<v Speaker 2>go to credit Karma and you create an account, be

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<v Speaker 2>aware they'll try to, like, you know, get your sign

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<v Speaker 2>up for credit cards. We'll try to entice you to

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<v Speaker 2>sign up for credit products because they're going to know

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<v Speaker 2>a lot about you. But the cool thing is there's

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<v Speaker 2>like credit score cards that you can you can tap

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<v Speaker 2>into and you can see, Okay, what is harming my

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<v Speaker 2>credit score? If I have a poor credit score, you'll

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<v Speaker 2>be able to like see two of your credit scores

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<v Speaker 2>recur credit. Your credit card company is typically going to

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<v Speaker 2>have great credit information for you that's widely available. That

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<v Speaker 2>wasn't the case twenty years ago, but it is now.

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<v Speaker 2>So there's so many ways to kind of check in

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<v Speaker 2>on your status. Hey, what's my credit looking like? How

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<v Speaker 2>can I beef that up? How can I improve my

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<v Speaker 2>credit so that I am getting the best terms when

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<v Speaker 2>I do need to borrow?

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<v Speaker 1>All right? And for lots more great financial advice, credit scores,

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<v Speaker 1>whether you need college.

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<v Speaker 3>And new cell phone plans. You can listen to.

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<v Speaker 1>How to Money with Joel Larsgard right here on KFI.

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<v Speaker 1>It's every Sunday from noon to two. You can also

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<v Speaker 1>follow Joel how to Money at at at how to

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<v Speaker 1>Money Joel.

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<v Speaker 2>Thank you Joel, Thanks Amie, appreciate you.

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<v Speaker 3>Stay cool.

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<v Speaker 2>We'll do.

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<v Speaker 3>That. Chance