Speaker 1: Oh bed thatsar. Hello and welcome to the show. This
Speaker 1: is the Cult of Conspiracy and I am the Cajun Night,
Speaker 1: I'm raven Ly, and today we are going to be
Speaker 1: talking a little bit about finance, a little bit about
Speaker 1: some math, a little bit about some the background and
Speaker 1: the evils behind the credit score, my favorite subject ever. Yeah, yeah,
Speaker 1: I know that this might sound a little dry on
Speaker 1: the onset to all the good cult members, but I'm
Speaker 1: just gonna be honest with you. I didn't know much
Speaker 1: about credit scores.
Speaker 2: I still I've heard all sorts of wild shit about
Speaker 2: credit scores.
Speaker 3: I've heard that the really rich people tell you not
Speaker 3: to have any credit score, that they just pay for
Speaker 3: everything in cash, and like, fuck the credit score, it
Speaker 3: doesn't matter. I've heard, you know, make sure, for obviously,
Speaker 3: from when I was a kid, make sure your credit
Speaker 3: score is like in the seven eight hundreds, which I
Speaker 3: did have almost eight hundred at one point in life.
Speaker 1: Be life in so two divorces royally fucked my credit score.
Speaker 1: At one point in time, I was like a low seven.
Speaker 1: I felt good about myself. Divorce happened, it dropped down
Speaker 1: to the mid threes, and then you know, I built
Speaker 1: it back up to about the high sixes at one
Speaker 1: point in time, and then I haven't looked, and to
Speaker 1: be completely honest with you, I'm afraid to look right now.
Speaker 1: And that's fine. Here's the deal. Like you're saying here,
Speaker 1: the rich people don't have credit scores because they buy
Speaker 1: things cash. I'm sure there is some sort of a
Speaker 1: credit score associated with their name, but they're not worried
Speaker 1: about what their score looks like to get approved for
Speaker 1: a loan, because, if anything, they'll just use one of
Speaker 1: their assets as collateral for a loan if they want it.
Speaker 1: And to be honest with you, the ultra elites, that's
Speaker 1: all they ever do. They don't actually have. You know,
Speaker 1: I saw something recently how California is trying to tax
Speaker 1: the wealthiest one percent of like ten percent of their
Speaker 1: of their assets right off the rip, like they have
Speaker 1: to cut a check. And that's why Elon and a
Speaker 1: bunch of other rich people left California because let's say
Speaker 1: he's worth one hundred billion, just throwing out a number here,
Speaker 1: they act as if he has a billion dollars in
Speaker 1: the bank ready to go. That's not how that goes.
Speaker 1: It's tied up in assets. It's tied up in percentage
Speaker 1: of ownerships of stocks, all shores, accounts, things like this.
Speaker 1: And then the other side of that is if just
Speaker 1: throwing out that are arbitrary number for the arbitrary guy here.
Speaker 1: I know Elon's not worth a hundred billion to hear
Speaker 1: me up. If he was to sell percentage of ownership
Speaker 1: in Tesla to make that payment, that tanks the stock,
Speaker 1: which makes all of his other assets drops, which makes
Speaker 1: the amount that he's worth drops. It's psychoticness that what
Speaker 1: they're trying to do in California. But neither here nor
Speaker 1: there right.
Speaker 2: So does the credit score actually matter for people like
Speaker 2: you and I?
Speaker 1: Yes, for people like the wealthy elite, that's not even
Speaker 1: the thing they really consider. That's like, what's the gas
Speaker 1: prices right now? They don't give a fuck they have drivers.
Speaker 1: I mean, but I've heard like in between people, a
Speaker 1: lot of people are like, fuck, credit score, like doesn't
Speaker 1: even matter. I'm like, I really feel like it does matter, though.
Speaker 1: But it's one of those scenes that they don't really
Speaker 1: teach you though, unless your parents teach you. They don't
Speaker 1: teach you in high school, which I think that is
Speaker 1: absolutely ridiculous. They should teach children about finance's credit cards, taxes. Hell,
Speaker 1: I am ridiculously dumb when it comes to taxes. My
Speaker 1: mom is the brilliant one.
Speaker 2: And it's like, okay, why did nobody even get like
Speaker 2: a basic course on this? Right?
Speaker 1: And so today we are going to do a little
Speaker 1: bit of a deep dive into that course and talk
Speaker 1: about how the system is rigged against you through no
Speaker 1: fault of your own. Here's the deal, here's the background
Speaker 1: to this ravenly debt has been a thing since the
Speaker 1: beginning of time. Right, Obviously that's nothing new. But if
Speaker 1: you had to guess where did credit scores come from?
Speaker 2: Ooh, didn't it come from?
Speaker 3: Potentially the crash the almost crash in the market, like
Speaker 3: way way back in the day. I'd say in the
Speaker 3: early nineteen hundreds, or actually I think it was the
Speaker 3: eighteen hundreds, right, they kind of like decided on it
Speaker 3: and then they pushed it forward.
Speaker 2: In the nineteen hundreds. I might be speaking out my ass.
Speaker 1: No, No, to be honest with you, I would have
Speaker 1: given just about that kind of an answer before I
Speaker 1: did some research on this.
Speaker 3: Prepare this is like sixteen hundred's with the Kings and
Speaker 3: this is like a debt score, credit score situation.
Speaker 1: Raven Ravenlee and all the good cult members. If you
Speaker 1: do not know, no, oh my god, no, all right,
Speaker 1: do I promise the window. I had no idea where
Speaker 1: this came from, and now that I know this, I'm
Speaker 1: actually pretty fucking pissed off about it. I'm gonna be honest,
Speaker 1: I'm a little hot right now.
Speaker 2: If this is something like that just came about in
Speaker 2: the last like fifty years, I gonna be livid.
Speaker 1: Oh oh, it's so funny that you would use that
Speaker 1: specific number. But we're gonna get to it, so all right, Okay.
Speaker 1: Background to this, In the mid nineteen fifties, two dudes
Speaker 1: named Isaac and Fair decided to start the Fair and
Speaker 1: Isaac Company Fico Fight. Oh they are the ones that
Speaker 1: decided on an arbitrary number to try to make banking
Speaker 1: and loan approval more streamlined, right, because think about how
Speaker 1: people had to get loans throughout the course of the
Speaker 1: vast majority of human history. It was always about going
Speaker 1: to a loan officer, a wealthy financier, or whatever the
Speaker 1: case was. But aside, let's just talk about the United States, Okay,
Speaker 1: let's talk about in just the United States of America
Speaker 1: nineteen forties. You are a family and you want to
Speaker 1: get approofd for a loan for some land, a new house,
Speaker 1: a business venture, whatever the case would be. You would
Speaker 1: go to your local bank or even if it was
Speaker 1: a credit union, a national, what doesn't matter. You're going
Speaker 1: to the loan house essentially, and you would have to
Speaker 1: dress nice. You would have to show all this documentation
Speaker 1: to make it worth the bank's time to really approve
Speaker 1: you of this loan. But it only came down realistically
Speaker 1: to the loan officer to give you the thumbs up
Speaker 1: her thumbs down. Now, there were some pros and cons
Speaker 1: that came with that right. For instance, the loan officer
Speaker 1: who says, well, okay, this person has never been approved
Speaker 1: of a loan before, but I went to high school
Speaker 1: with his daddy, and I know the people. I know
Speaker 1: his family and where he comes from, and I know
Speaker 1: that he was taught how to handle his finances properly.
Speaker 1: You know what, This might be a large loan, but
Speaker 1: I know his people. I'm gonna go ahead and prove
Speaker 1: this advertly. Let's say that it was a black family
Speaker 1: and we're talking about the nineteen fifties, they're probably gonna
Speaker 1: get denied outright. Oh and how about women, right, did
Speaker 1: you know that it was illegal for women to get
Speaker 1: large loans without their husbands up until the seventies. Yeah,
Speaker 1: I'm not shocked.
Speaker 2: I'm not surprised, to be honest with you.
Speaker 1: Well, when I say that, that sounds a bit misleading.
Speaker 1: It was state to state, but more often than not, yes,
Speaker 1: you're not gonna have some woman try to do to
Speaker 1: guess with states. Honestly, most of New England and most
Speaker 1: of the West coast, New.
Speaker 2: New England, Oregon, all places.
Speaker 1: Oregon, Yeah, most of the West coast. You gotta keep
Speaker 1: in mind, like California was not liberal up until like
Speaker 1: the eighties.
Speaker 2: I was honestly thinking like Midwest. For some reason in
Speaker 2: my mind, I was like Midwestern kind of situation.
Speaker 1: Most country are most countries, most counties, and those states
Speaker 1: had pretty strict laws on that because they didn't want
Speaker 1: women walking out on their husbands or doing these types
Speaker 1: of things. Because keep in mind, most women didn't work
Speaker 1: up until like I mean, yeah, we had the Industrial
Speaker 1: Revolution and then World War Two. A lot of women
Speaker 1: went to the factories, but you didn't have a lot
Speaker 1: of women clocking in to have full time jobs until
Speaker 1: the fifties and sixties more often than not, and then
Speaker 1: the seventies is when that really became full swing. Women
Speaker 1: empowerment was the shit. So up until that point, if
Speaker 1: a woman was to take a large loan, her husband
Speaker 1: would be on the hook for her loans. So it
Speaker 1: was seen as a way to protect this guy's interest
Speaker 1: because let's say he has a wife who's a shopaholic.
Speaker 1: He's over here working some nine to five job, making
Speaker 1: his payments, all the things, but then his wife takes
Speaker 1: out a ten thousand dollars loan beknownst to him, with
Speaker 1: no way of paying it back. Now he gets a
Speaker 1: knock on the door asking where the money's at, and
Speaker 1: he knew nothing about it. So, and I'm not saying
Speaker 1: that this is justification, because a lot of times these
Speaker 1: women were looking for loans to try to better themselves,
Speaker 1: better than face whatever the case was. Especially when it
Speaker 1: comes to racial discrimination. You would have a black family
Speaker 1: that moved to a new town. Maybe they moved from
Speaker 1: the Southern States and they moved up north, and they're
Speaker 1: just trying to, you know, break out and start their
Speaker 1: own thing, put down roots up North. But the problem
Speaker 1: is with no loan history, they are left at the
Speaker 1: behest of whatever the loan officer feels about them. And
Speaker 1: it was basically it was basically vibes based like that
Speaker 1: was it if you get a good feel for this person,
Speaker 1: or if you don't, and if maybe you have some
Speaker 1: racial ideologies to it or some sexist ideologies to it
Speaker 1: or whatever. It really came down to the loan officer.
Speaker 1: So the credit score was invented as a way to
Speaker 1: try to standardize these things. But here's the problem. They
Speaker 1: used all of the old data to make their algorithm.
Speaker 1: So whenever the credit score was started by fair in ISAAC,
Speaker 1: essentially they were using all of the data that said, well,
Speaker 1: I don't know if we can trust a woman for
Speaker 1: this type of loan. Oh wait a minute, that black
Speaker 1: family from Alabama, I don't know about all that. And
Speaker 1: it wasn't even a person that was approving this. It
Speaker 1: was an arbitrary number that the banks could use as
Speaker 1: a shield to say, hey, wait a minute, we didn't
Speaker 1: deny the loan. This arbitrary number said that it'd be
Speaker 1: too risky for our bank to give the loan.
Speaker 3: So where do they get the information from, like what
Speaker 3: data did they pull because there wasn't really a lot
Speaker 3: of data collection happening prior to nineteen fifty.
Speaker 1: Oh, Raven, I'm so glad you asked this question. And
Speaker 1: then the best part, what are they doing with that
Speaker 1: data now? Because they're just selling it to insurance company? Yeah,
Speaker 1: we're gonna get to it. We're gonna get to it.
Speaker 1: All good cult members. And you know what, I got
Speaker 1: some articles to share. I got a video we're gonna
Speaker 1: play at the end. That kind of brings it all
Speaker 1: to a head.
Speaker 2: Here.
Speaker 1: If you would like to see what we are talking about,
Speaker 1: see our faces, see the articles and the videos and
Speaker 1: all the things, then what you needed to do is
Speaker 1: go to Patreon dot com slash Cult Conspiracy Podcast. That
Speaker 1: link is down in the show's below. It is the
Speaker 1: only place to get these shows. Well, I might as
Speaker 1: well just give it now. That is the only place
Speaker 1: to get these shows absolutely. But also you will get
Speaker 1: to see the articles, you get to see the videos,
Speaker 1: and you'll get these shows a couple of days in advance,
Speaker 1: if not up to a week in advance sometimes, But
Speaker 1: that is only for the lowest tier. If you go
Speaker 1: to that third eye all the way Open tier. You'll
Speaker 1: also get to join us every Tuesday night for our
Speaker 1: Cult Member Live That is Tuesday nights at nine pm
Speaker 1: Central Time. It is a fun time. It's unhinged. I
Speaker 1: feel like last night we spent way too much time
Speaker 1: talking about the most disturbing things. But you know, that's
Speaker 1: what the Tuesdays are for.
Speaker 2: I'm just not gonna talk about it.
Speaker 1: It's there, it's there if the Cult members, it's out
Speaker 1: on the ether, so you know it's out that whole thing. Also,
Speaker 1: if you go to that Maniac tier, you will not
Speaker 1: only get all these exclusive offers, but you will also
Speaker 1: be getting exclusive merchandise opportunities and a care package sent
Speaker 1: to you packaged by our wonderful Raven Lee. But also
Speaker 1: we have some well what's going on on the Patreon
Speaker 1: that raven Lee is spearheading. Go ahead and tell them
Speaker 1: about it, raven It is our book club.
Speaker 3: You can join our book club every Sunday night. We're
Speaker 3: going to go between one to two hours where we
Speaker 3: discuss a book of choice. We're going to take an
Speaker 3: entire month to read a book. We have a whole bowl,
Speaker 3: it's really fancy with my top aware bowl that we
Speaker 3: pick from and We're just going to read it and
Speaker 3: break it down and have discussions about what do we
Speaker 3: think what kind of topics. Right now, we are going
Speaker 3: to start reading How Jesus Became God. No, it is
Speaker 3: not a Christian echo chamber. This is actually a book
Speaker 3: that was given to us by our resident Jew, and
Speaker 3: it is a book about You said it.
Speaker 2: Was heretical, Oh, heretical.
Speaker 3: Yeah, so I've read some of it a little bit,
Speaker 3: like I've listened to it on because you can get
Speaker 3: this book on audio and purchase it as well.
Speaker 2: We are starting February first. Officially, you do have to
Speaker 2: be a third All the Way Open member or a
Speaker 2: Maniac member and uh yeah, come join us. It's going
Speaker 2: to be great.
Speaker 3: I think we have quite a few people already that
Speaker 3: are signed up for it, so we're just gonna bullshit.
Speaker 2: We are not going to release this, so it is
Speaker 2: an exclusive thing for those.
Speaker 1: Tiers absolutely, So without further ado, I'm going to go
Speaker 1: ahead and share the screen at this time and we
Speaker 1: are going to learn together good cult members about credit
Speaker 1: credit scores, the banking industry, the financial system, and how,
Speaker 1: through no fault of your own, you're being screwed because
Speaker 1: of the demographic that you happen to fall into. Banks
Speaker 1: do not approve loans based off of what you have
Speaker 1: done in your credit history. They're doing it off of
Speaker 1: what other people that look like you, that live in
Speaker 1: your area, that make close amounts of money to you,
Speaker 1: have done, and they're basing this off of that. What
Speaker 1: Oh yes, oh yes, it has nothing to do with you.
Speaker 1: It never has. For the record, let's say, and just
Speaker 1: throwing this out.
Speaker 3: You're seeing the demographic of those around you as like
Speaker 3: a collective. So if you live in an area where
Speaker 3: half the people are shit and don't know how to
Speaker 3: manage money, suck.
Speaker 1: It's what So here's the deal, bullshit. I'll give you
Speaker 1: a great example of this. Let's say that you pay
Speaker 1: your rent every month on the first of the month
Speaker 1: without fail for twenty years. The credit bureau doesn't give
Speaker 1: a fuck about that, because if your landlord never reported it,
Speaker 1: what difference does it make to them?
Speaker 3: Okay, so it's only taking the native stuff that gets reported, though,
Speaker 3: and that's how it's lowering your credit score. It's not
Speaker 3: actually raising your credit score for when you're actually doing
Speaker 3: the right thing.
Speaker 1: Yes, and we are going to talk about what goes
Speaker 1: into your credit score here in a bit. And although
Speaker 1: there's tons of these websites that I have pulled up
Speaker 1: that are all financial institutions and things like that, and
Speaker 1: they're trying to make it sound like this is a
Speaker 1: really good thing. I want everybody, as we're reading these
Speaker 1: articles to look at it and think of it critically
Speaker 1: and think about what the drawbacks of everything that's going
Speaker 1: to be said actually is. So let's start off from
Speaker 1: the beginning here. We're talking about how women were denied
Speaker 1: loans a lot of times. So we're ethnic minority groups
Speaker 1: and it varied place to place, and I understand that.
Speaker 1: But okay, this article here from the Competitive Enterprise Institute.
Speaker 1: It says, yes, when had access to credit before nineteen
Speaker 1: seventy four, But I want you to hear what type
Speaker 1: of credit they had access to before I even start raven.
Speaker 1: If you had to guess what type of credit and
Speaker 1: I don't mean a credit card, I mean like running
Speaker 1: a tab so to.
Speaker 2: Speak, what do you makeup?
Speaker 3: Because it's been proven that even in wartimes, women will
Speaker 3: make sure that they are able to at least buy
Speaker 3: a lipstick. Okay, I just I would assume it had
Speaker 3: to do with makeup. Or it would have to do
Speaker 3: with the door to door salesman coming and by doing
Speaker 3: the dishwasher. The refrigerator was a big thing that you
Speaker 3: got had to put on loan.
Speaker 1: Sure, but they couldn't do that without their husband's signature.
Speaker 2: Though that's fair.
Speaker 1: Yeah, I can't think of maybe clothing, groceries.
Speaker 2: Groceries.
Speaker 1: Okay, So let's talk about it as much as this
Speaker 1: article is saying, yes, women had access to credit, it's like,
Speaker 1: but did they did they actually to the level that
Speaker 1: we are talking about here, So let's break this down
Speaker 1: here and again, we were talking about American history, and granted,
Speaker 1: America's history is not all sunshine and rainbows. We have
Speaker 1: had a very troubled and ugly and fucked up past,
Speaker 1: but we have to acknowledge that pass to understand how
Speaker 1: we got to where we're at now so that we
Speaker 1: also can learn from it and teach the younger generation.
Speaker 1: Because up until nineteen eighty nine, this wasn't a thing
Speaker 1: that was used in loans.
Speaker 2: Yeah, it was an eighty nine.
Speaker 1: Credit scores were invented in the fifties, but they weren't
Speaker 1: actually used until the nineteen seventies, and they didn't become
Speaker 1: a national a nationwide standard. I was gonna say a
Speaker 1: national standard or a nationwide standard. I just combined words
Speaker 1: because that's what I'd be doing sometimes. But it didn't
Speaker 1: become a national standardized metric until eighty nine.
Speaker 2: Yeah, oh my god, it's thirty six years old. That's it.
Speaker 1: Here we are, here, we are so now our entire world.
Speaker 2: Is run off this bullshit elaborate random score and.
Speaker 1: Made by two guys in the San Francisco apartment in
Speaker 1: the nineteen fifties. And before you ask good cult members, no,
Speaker 1: neither of them, I thought, so. No, neither of them
Speaker 1: were Jewish.
Speaker 2: That's not what I was thinking.
Speaker 4: I was.
Speaker 2: I thought you were gonna say neither of them were gay,
Speaker 2: and I was like, oh maybe it was like I
Speaker 2: don't know why that matters.
Speaker 1: Were like, okay, no, No, before you're thinking and we're
Speaker 1: talking about the guys that invented credit scores for the
Speaker 1: banking and all this, my initial thought was, oh, here
Speaker 1: we go as the Jews. No, actually, neither of them
Speaker 1: were Jewish by dissent or by religion. Shockingly, I honestly
Speaker 1: no one was more shocked to find that out than me.
Speaker 1: I'm gonna be honest. But anyway, let's get into it now.
Speaker 1: Let's talk about some women, dude. So this was actually
Speaker 1: written in March of twenty twenty five. So March is
Speaker 1: Women's History Month, a time to acknowledge and celebrate many
Speaker 1: firsts quote unquote for women in public life. One of
Speaker 1: those first is the ability for American women to open
Speaker 1: a credit card independently without a husband or father's co signatory,
Speaker 1: following the passage of the Equal Credit Opportunity Act the
Speaker 1: ECOA by congres in nineteen seventy four. We're gonna talk
Speaker 1: more about that one in particular in a bit, but
Speaker 1: here we go. This bill prohibited discrimination in credit transactions
Speaker 1: based off of sex or marital status, and is generally
Speaker 1: considered a landmark for women's financial independence. However, this is
Speaker 1: only partly true. I will give at least the little addendum. Now,
Speaker 1: the ECOA and the Fair Housing Market Act, and these
Speaker 1: things are the reason, the only reason why credit scores
Speaker 1: ever got implemented in the first place. Again, these were
Speaker 1: now being used as a shield to protect the banks
Speaker 1: to where I didn't my loan officer didn't deny the loan.
Speaker 1: They had a low credit score. That's it. Was seen
Speaker 1: as a non judgmental risk assessment, you know, data, and
Speaker 1: it seemed like it was too much of a risk
Speaker 1: for us to do. Say. Well again, we'll get to
Speaker 1: that more in a bit, but the seventies is specifically
Speaker 1: why it even got started. Implemented, the ECA made it
Speaker 1: illegal for banks to discriminate based on sex or marital status.
Speaker 1: The law didn't grant women access to credit, but rather
Speaker 1: formalize their ability to sue for discrimination. Much like women
Speaker 1: had been voting in American election since the seventeen hundreds,
Speaker 1: before the passage of the nineteenth Amendment to the Constitution,
Speaker 1: women had also been navigating loans, credit, and financial systems
Speaker 1: long before the nineteen seventy four law. Okay, women could
Speaker 1: vote in this country, before women's suffrage became a national standard. However,
Speaker 1: the stipulations to who was allowed to vote realistically came
Speaker 1: down to money and land ownership. And if you there
Speaker 1: were women that, through inheritance or through their own grit whatever,
Speaker 1: did own land and were able to vote. But y'all,
Speaker 1: I gotta understand, this was the vast, vast minority. Like
Speaker 1: overall hell, most women couldn't even read in this country.
Speaker 3: Well that and also if they were found out to
Speaker 3: be voting, it was a huge thing too because how
Speaker 3: dare she so?
Speaker 1: But again that depended on the place. Like if you're
Speaker 1: a woman who is a member of a very well
Speaker 1: to do family, a very well known family from New
Speaker 1: York or from Boston or whatever the case, and they
Speaker 1: know that you specifically to your name, own fifty acres
Speaker 1: of land, and they know all of your people, no
Speaker 1: one's really gonna batten eye when you go in to
Speaker 1: cast your vote. But it wasn't like somebody from rural
Speaker 1: Kentucky was about to be bop up in here not
Speaker 1: be able to read the ballot and just cast their vote.
Speaker 1: The woman was gonna get shown the door. And so
Speaker 1: it varied. But like I said this article, what happened.
Speaker 3: If what happened if the woman wasn't married and like
Speaker 3: her father was dead, then it had to be like
Speaker 3: the next of ken, like her brother or her uncle.
Speaker 1: Yeah, you would have to have some sort of a
Speaker 1: male family co signer for pretty much any big financial
Speaker 1: movie tried to make. And that was also a really
Speaker 1: dangerous thing for a lot of women too, And that's
Speaker 1: why the old age was like, if you're single, by
Speaker 1: twenty one, So you're gonna die alone. You're just gonna
Speaker 1: be an old spinster lady. Basically, you what do you
Speaker 1: mean you're not married with two kids by twenty Are
Speaker 1: you crazy? That's you're on a time clock lady. Like
Speaker 1: it was a crazy, crazy mindset that went. And for
Speaker 1: the record, not just American culture, that was a lot
Speaker 1: of European culture as well, but these women, especially if
Speaker 1: they most women weren't accepted into job markets right and
Speaker 1: there there were certain crafts and certain jobs they could hold.
Speaker 1: They would get paid substantially less than their male counterparts
Speaker 1: for probably doing the exact same word, And I don't
Speaker 1: mean a few cents less, like it would be substantial realistically,
Speaker 1: very much so, very much so. And so it seemed
Speaker 1: like it was the better choice for a woman, a
Speaker 1: young woman to marry somebody and if she does earn
Speaker 1: a paycheck and all these things in fine, or she
Speaker 1: could be a stay at home on whatever the case
Speaker 1: would be. But it was seen even within themselves as like, Okay,
Speaker 1: it's a way better option for me to marry a
Speaker 1: guy and deal with some shit then have to work
Speaker 1: for pennies on the dollar and hope that I can
Speaker 1: afford to feed myself for the rest of my life.
Speaker 1: So it was the system was rigged in that way.
Speaker 2: It was.
Speaker 1: It was a mess.
Speaker 2: But anyway, So valu value in vodka, men.
Speaker 1: Valume in vodka? You mean laudnum and whiskey. Man to
Speaker 1: what level? I'm talking the Old West?
Speaker 2: I know. I was just saying a lot of women
Speaker 2: were take that valume too.
Speaker 1: So yeah, when volume became a thing that was inqual too.
Speaker 2: Valume and vodka, yep, that was the whole vibe. Just say,
Speaker 2: you know, get through the day.
Speaker 1: I guess I'm But anyway, I just so were clear.
Speaker 1: The article made that sound a little misleading. Women were
Speaker 1: not voting in the seventeen hundreds. A select few women
Speaker 1: over the entirety of the states had that ability. But anyway,
Speaker 1: moving on here. In the nineteenth century, both single and
Speaker 1: married American women relied on local stores and small businesses
Speaker 1: for credit. These businesses often granted credit based on personal
Speaker 1: trust and reputation, allowing women to purchase necessary items even
Speaker 1: without ready cash. A charge account at a general store, restaurant,
Speaker 1: or similar establishment could be settled at the end of
Speaker 1: the week or paid periodically, like in the TV show
Speaker 1: cheers a place where everybody knows your name, it's hard
Speaker 1: to skip out on a bill and easier for a
Speaker 1: business to give grace to customers who needed this. Non
Speaker 1: mandated localized credit access was part per particularly Jesus, particularly
Speaker 1: important to women. So that's what I mean. If you
Speaker 1: had miss Smith, and you know, Miss Smith is gonna
Speaker 1: come in and she's getting groceries for her family, and
Speaker 1: her husband gets paid twice a month, right but she
Speaker 1: needs those groceries right now, the clerk at the store
Speaker 1: would give her a little bit of leeway and give
Speaker 1: her some credit. But that's also miss Smith, you know
Speaker 1: what I mean, Like your kids probably played t ball together,
Speaker 1: Like it's you know who she is, and you know
Speaker 1: she's good for it, so you would have some leniency.
Speaker 1: But it was very locally based. It wasn't to a
Speaker 1: national credit because.
Speaker 3: There's no paper trail, so there's no actual quote unquote
Speaker 3: credit score. Have word of mouth through people. That doesn't
Speaker 3: really matter to the banks because even if you're trying
Speaker 3: to get a loan, you have nothing to show for
Speaker 3: that you actually are.
Speaker 2: Worth a lick or your words, so exactly, and it's
Speaker 2: a whole system just to you know, that's essentially it.
Speaker 1: And so when fair and ISAAC founded Fiico and they
Speaker 1: started making these arbitrary credit scores, they were using data
Speaker 1: from the past few decades. And here's the problem, like
Speaker 1: you just said, if there's no data on women, or
Speaker 1: on minority groups, or on this bump fuck nowhere town,
Speaker 1: then how are you going to compare anything against anything. So,
Speaker 1: believe it or not, the credit score actually ended up
Speaker 1: screwing more people over especially in the beginning, than it
Speaker 1: did help them. And then these people had to start
Speaker 1: establishing credit. And we're going to get more into what
Speaker 1: you have to do to establish credit. They don't want
Speaker 1: you to pay off your debts. That's another thing too.
Speaker 1: If you were to go right now and pay off
Speaker 1: every single one of your credit cards, pay off your
Speaker 1: car note, pay off your mortgage, and they look at
Speaker 1: your debt to income ratio, right and you're thinking that's
Speaker 1: an important factor. No, you just fucked yourself.
Speaker 3: They want you to have that generating Yes, you have
Speaker 3: to establish your payments, you have to be able to
Speaker 3: show that your trustworthy to pay your payments on time.
Speaker 2: But you don't want to pay the minimum.
Speaker 3: You want to pay a little bit above the minimum,
Speaker 3: So that way you can pay a little bit of
Speaker 3: the interests but not all the interests.
Speaker 2: And it's a whole thing. But that's how the market
Speaker 2: for the doorder door salesman came about as well, So
Speaker 2: it all was tied in conjunction to each other.
Speaker 3: Plus the consumerism model. I'm wondering if they had a
Speaker 3: hand with the consumerism situation. So that way, hey, this
Speaker 3: allowed you to take this line of credit to be
Speaker 3: able to buy these fancy things. Plus they had the
Speaker 3: television going where it was showing like, well, look if
Speaker 3: you just had this really awesome you know, refrigerator has
Speaker 3: all these compartments, you'd be such a better housewife. This
Speaker 3: is what you need, or hey, this is what you
Speaker 3: need to look more like a man. And then you
Speaker 3: have people coming around and like, oh now this will
Speaker 3: help boost your credit score. This will actually build it
Speaker 3: for you. Yeah, it's quite intelligent design, I'll say that.
Speaker 1: So that wasn't the intent when they made the credit score.
Speaker 1: They were actually trying to streamline. And I'm not saying
Speaker 1: that Fair and Isaac were like good dudes. I don't know,
Speaker 1: I'm putting them into the neutral category. Honestly, they they
Speaker 1: started this, they weren't bankers. One of them was a
Speaker 1: mathematician and one of them was an engineer, right, and
Speaker 1: they were trying to hedge their bets on human behavior
Speaker 1: and putting a number designation on a certain group of people.
Speaker 1: And I don't mean all white people all black people.
Speaker 1: That's not what I'm saying here. It's more like, Okay,
Speaker 1: a white guy from Jackson, Mississippi, who earns X amount
Speaker 1: of dollars every year. People like that. There's let's say
Speaker 1: there's two thousand of this particular type that's living in Jackson,
Speaker 1: Mississippi at this time. How many of them defaulted on
Speaker 1: their payments last year? How many of them their houses
Speaker 1: went into foreclosure and things like this? Okay, pretty much
Speaker 1: all of them made their payments on time. There were
Speaker 1: some ones intoosies, but overall they did. None of them
Speaker 1: foreclosed on their homes. How some of them even bought
Speaker 1: bigger homes. Okay, that group needs a higher credit score.
Speaker 1: That's essentially what it was. And so I don't think
Speaker 1: that they were doing it to fuck over anybody, at
Speaker 1: least on the onset. But later on it became that
Speaker 1: because the credit scores that they designed or at least
Speaker 1: how it was intended was to give basically a streamlining
Speaker 1: to bank officers and banks in general approving or denying loans.
Speaker 1: It wasn't trying to make the consumer market get interest
Speaker 1: generating in therefore profit generating debt. At least that's not
Speaker 1: what it seemed.
Speaker 3: But maybe that's not what it intended. But when the
Speaker 3: consumerism models and those people came about and saw this happening,
Speaker 3: how did they introduce us though into the banks? That's
Speaker 3: what I'm wondering. How did this even get picked up?
Speaker 3: Because people have ideas every day, but nothing come You're
Speaker 3: talking about changing the entire course of American history and
Speaker 3: changing how we do everything.
Speaker 2: Yeah, so, how the hell did you even come about?
Speaker 2: I don't understand you.
Speaker 1: Ever heard of Equifax TransUnion? Yes, yeah, we're gonna be
Speaker 1: talking about those in a bit, because that's pretty much
Speaker 1: where it took its turn. And this was in the eighties. Yeah, okay,
Speaker 1: So anyway, prior to the nineteen seventies, marriage too often
Speaker 1: dictated the terms by which women accessed credit, since married
Speaker 1: women's prosperity or property was also owned by their husband's
Speaker 1: only unmarried women could independently form contracts and engage in litigation.
Speaker 1: That's the author of to Her Credit Rights. In her
Speaker 1: book examining finances of women during the America's eighteenth century
Speaker 1: revolutionary period, she found that quote women in Boston and
Speaker 1: Newport appeared in debt litigation as creditors and debtors in
Speaker 1: equal proportions. However, quote women's credit networks were predominantly local
Speaker 1: end Quote women routinely made purchases on credit, signed contracts,
Speaker 1: participated in court cases, and settled debts. At that time,
Speaker 1: married women also commonly extended lines of credit to their
Speaker 1: unmarried friends, which is true, but again they had to
Speaker 1: have the funds on standby to do such, and there
Speaker 1: wasn't many women that could qualify for that. But anyway,
Speaker 1: a hallmark example of a revolutionary araw woman navigating the
Speaker 1: financial system is Abigail Stoneman, a widow who open and
Speaker 1: operated inns in t and tea shops in New England
Speaker 1: in the seventeen hundreds. Also, if anybody's curious about her,
Speaker 1: that is a fascinating woman to look into. This chick,
Speaker 1: and she was a widow. She inherited these things because
Speaker 1: her husband died. She picked up the ball and ran
Speaker 1: with it, and if I'm not mistaken, she might be
Speaker 1: the first millionaire on the US continent. Really I think so,
Speaker 1: or at least the first female millionaire. But something no, actually,
Speaker 1: excuse me. The her female millionaire was a black woman
Speaker 1: who developed a makeup line specifically for black women. I
Speaker 1: think this was in the nineteen twenties.
Speaker 2: As a matter of fact, I know you're talking about.
Speaker 2: I can see her face.
Speaker 1: Same. She was riding in the back of a drop
Speaker 1: top caddy like she was a pimp because she was
Speaker 1: anyway moving on here. So she extended lines of credit
Speaker 1: to other business owners and her own customers. In fact,
Speaker 1: there were so many documented appeals in local newspapers by
Speaker 1: creditors like Stoneman requesting repayment from debtors. So again, she
Speaker 1: was the exception, not the standard. But credit access differed
Speaker 1: from state to state. For example, in eighteen forty eight,
Speaker 1: the Married Woman's Property Act passed in New York and
Speaker 1: established that a woman was no longer liable for her
Speaker 1: husband's debts, could enter contracts on her own, was able
Speaker 1: to collect rent or receive an inheritance in her own right,
Speaker 1: and could file a lawsuit on her own. Behalf the
Speaker 1: act became a model for other states. So again, as
Speaker 1: long as she was not liable for her husband's debts,
Speaker 1: otherwise they would take it out of the estate and
Speaker 1: she would become a poor widower, which you know anyway,
Speaker 1: So the rise of the department stores and catalogs. By
Speaker 1: the late nineteenth and early twentieth centuries came the emergence
Speaker 1: of department stores and mail order clothing catalogs like you
Speaker 1: had mentioned, raven Larger businesses were able to offer more
Speaker 1: formalized credit options catering to women's shopping experiences. The quote
Speaker 1: unquote charge plate, akin to a in store card, was
Speaker 1: somewhat of a predecessor to modern credit cards. Although single
Speaker 1: women faced more challenges in securing credit, they could still
Speaker 1: apply and receive credit by providing proof of financial stability.
Speaker 1: Over time, these store accounts, costly to maintain and collect on,
Speaker 1: gave way to portable credit cards managed by banks that
Speaker 1: could be used at other stores. So now, leading up
Speaker 1: to the ECOA, in the early nineteen seventies, women's organizations
Speaker 1: gathered testimony from women nationwide describing their hassles receiving letters
Speaker 1: of credit and financial services from local banks. These letters
Speaker 1: were presented in a hearing before the National Commission on
Speaker 1: Consumer Finance in May of nineteen seventy two. This and
Speaker 1: subsequent hearings helped inform the nineteen seventy four bill. Although
Speaker 1: the bill was passed, it did not guarantee that women
Speaker 1: or women owned businesses would be considered credit worthy by banks.
Speaker 1: It merely allowed them to pursue legal recourse for discrimination
Speaker 1: based on sex.
Speaker 2: So that is wild to me. This was so this
Speaker 2: was not very long ago, but real shit. And it's
Speaker 2: just it's crazy to me when people like get all
Speaker 2: huffy and puffy when women mentioned things like this, and
Speaker 2: it's like, this was not very long ago, but this
Speaker 2: didn't just affect us. So disabled people weren't allowed to
Speaker 2: get shit either. All the minority groups were not allowed
Speaker 2: to get shit either.
Speaker 3: Like overall, it affected a large amount of people, and
Speaker 3: it's it's crazy that this was Like my parents were
Speaker 3: living through this time. Oh, my grandparents were here thriving
Speaker 3: and doing everything else. So my grandma actually owned the
Speaker 3: nursing homes. And I don't want to misspeak, but I
Speaker 3: think that she opened the first one and like seventy six,
Speaker 3: I remember, right somewhere around there, and I know that.
Speaker 2: I mean, she was married to.
Speaker 3: My grandfather, you know, then they eventually divorced and he
Speaker 3: passed and stuff. But I remember, like they've talked about,
Speaker 3: you know, the struggles of trying to get credit and
Speaker 3: all this stuff. I just never even really paid attention though,
Speaker 3: because when I was younger, I was like, I mean, yeah,
Speaker 3: everyone struggles to get credit cards whatever. Right now, knowing
Speaker 3: like the history of it, it's like, oh no, you
Speaker 3: like really mean you couldn't have get help because you
Speaker 3: had to have your husband sign on it in nineteen
Speaker 3: seventy four.
Speaker 1: Yeah, and again, this didn't make it easier. This just
Speaker 1: meant that the women could sue the bank. And I
Speaker 1: don't know if y'all know right right, but I don't
Speaker 1: know if y'all know this or not. But the banks
Speaker 1: got money, and they got money to hire the best
Speaker 1: lawyers on the planet. So let's say you have some
Speaker 1: some woman, some little, some little woman in your little
Speaker 1: town that got tonied for a little bank woan, and
Speaker 1: she's gonna take you to whittle court. Meanwhile, you're hiring
Speaker 1: like the best lawyer's money can buy to make her
Speaker 1: seem like an idiot. So just because they could take
Speaker 1: legal recourse that didn't really pan out for them very
Speaker 1: well more often than not.
Speaker 2: So can you imagine this that? And of course immigrants too.
Speaker 1: Oh same shit, Like yeah, I mean, it's the the.
Speaker 2: Amount of people that had had to deal with this,
Speaker 2: it's crazy.
Speaker 1: So keep in mind, we feel we allegedly put a
Speaker 1: guy on the moon before a woman could get a
Speaker 1: bank loan without her husband in tow.
Speaker 2: You know, everyone's gonna be like, you're a firm or nurse.
Speaker 1: I said, allegedly. And also, now fuck that, dude. If
Speaker 1: a woman could earn her her daily bread on her own,
Speaker 1: she should be able to get a loan. That's fucking retorted.
Speaker 2: Same with anybody else besides just men.
Speaker 3: So but even that, though only select few of men,
Speaker 3: let me, let's be really clear, there's only a margin
Speaker 3: of men that were allowed.
Speaker 2: To pretty much get loans. Everyone else was pretty much fucked.
Speaker 1: So pretty much, it's wild. It had to be the
Speaker 1: right type of guy, and it couldn't just be white guys,
Speaker 1: because like what about the Italian You know what I'm saying.
Speaker 1: I had to be the right type of white We
Speaker 1: couldn't have those guys getting loans. Go, you're kidding me.
Speaker 1: The Polish. You're going to give a loan to a
Speaker 1: Polish guy. Come on, now, the fucking Irish, mister bank officer,
Speaker 1: you just gave a loan to an fucking gypsy. Come
Speaker 1: on now, you see, you see what I'm saying. So
Speaker 1: it wasn't just well the Jews, they always got there,
Speaker 1: But the reality is it wasn't just all white men.
Speaker 1: It was a very select group of waspy, fucking guys.
Speaker 1: And that was that was basically it. And so moving
Speaker 1: on in the nineteen seventies, they passed the ECOA and
Speaker 1: now banks started and again they started getting some litigation.
Speaker 1: They started getting some people sue them, but they could
Speaker 1: afford the lawyers, and that was fine, but it got
Speaker 1: to a point to where they could no longer foot
Speaker 1: the bill for this mini legal fees. So now that
Speaker 1: credit thing, that that that the Fiico company, remember hearing
Speaker 1: about that, this these two dudes in California. They made
Speaker 1: this number, and it sidelined itself for a good while.
Speaker 1: Because a bank officer's got power, right, and I'm not
Speaker 1: saying like stroking your own ego power, but human intervention
Speaker 1: at the time seemed better for business than an arbitrary number,
Speaker 1: because some of these things could work in your favor. Right,
Speaker 1: Let's say that this loan officer who isn't worried about
Speaker 1: some credit score thing, it's all about how he felt
Speaker 1: about the individual. He can approve loans for a buddy
Speaker 1: of his, he can deny loans for an enemy of his.
Speaker 1: He can use this as a way to keep minority
Speaker 1: groups down. He could use this to elevate certain things
Speaker 1: in his town and work deals in backdoor kickbacks and
Speaker 1: shit like this. So the banks were not super jazzed
Speaker 1: up to grab hold to this whole credit score thing
Speaker 1: when it first came out, But once the nineteen seventies happened,
Speaker 1: they realized, oh wait a minute, we could use this.
Speaker 1: This could now be a shield to protect our loan
Speaker 1: houses because now our officer didn't deny you this loan
Speaker 1: because you're a black woman, you have a low credit score,
Speaker 1: and that you're gonna you're gonna sue a number. You're
Speaker 1: gonna sue the credit bureau, that's not the bank. You
Speaker 1: see what I'm saying here.
Speaker 3: Credibly shady shit anyways, though, Oh when they put shit
Speaker 3: on your credit score though, like and you can't get
Speaker 3: it off.
Speaker 2: I've petitioned the.
Speaker 3: Credit bureaus for like seven years to remove one thing
Speaker 3: that is completely false and it is messed with my credit.
Speaker 3: All this time they refuse. I've sent in documentation, I've
Speaker 3: called them, I'm evil them. I've done all this stuff,
Speaker 3: and I know people that have gone on and gotten
Speaker 3: so many things removed.
Speaker 2: And it's like, I who's doing this? Is? Is it? Ai? Like?
Speaker 2: Who is actually behind all this exactly?
Speaker 1: And that's the other thing. All these companies that claim, oh,
Speaker 1: you give me six months and I could have your
Speaker 1: credit score improved by two hundred points, they can because
Speaker 1: they're working the system, and it doesn't Actually they're not
Speaker 1: doing things to your finds. You're not paying off your
Speaker 1: debts in a different way than you normally would. They're
Speaker 1: shifting some numbers around to make the algorithm play more
Speaker 1: to your favor to make you have a higher credit
Speaker 1: score for that moment in time. In another six months,
Speaker 1: if you do nothing, your credit score go back to
Speaker 1: where it once was. But we're gonna talk about that
Speaker 1: a little bit later when we talk about the five
Speaker 1: key principles to what gives you your credit score and
Speaker 1: look at those a little more in depth. But as
Speaker 1: we're talking about this, all this, the banks, the credit scores,
Speaker 1: the bureaus, all of this go off of predictive analytics,
Speaker 1: which is modern risk management. And this is what is
Speaker 1: being used for your credit score. This is from Carrington
Speaker 1: Labs dot com. And we're gonna read a little bit
Speaker 1: about it. And again they're going to word this and
Speaker 1: spend it in a way that makes it very good.
Speaker 1: All of us should be using this in our lives,
Speaker 1: and it's gonna make it sound like this is clearly
Speaker 1: the smartest way to do it. Think about all of
Speaker 1: what I'm about to read.
Speaker 2: Credit the number do I know? Like where do? I
Speaker 2: still don't get where they got the number?
Speaker 3: Like I get the used mathematics and stuff, but if
Speaker 3: there's no data collection throughout the country, they just pulled
Speaker 3: a number out of their ass and was like close enough.
Speaker 1: Essentially, that's how they got the baseline. And the credit
Speaker 1: scores have been they've they've been altered and shifted a
Speaker 1: little here and a little there over the decades. Don't
Speaker 1: get me wrong, but when FIKO first started it, it
Speaker 1: was off of whatever data the banks are willing to
Speaker 1: give them at that time. And again, if this one
Speaker 1: bank has approved zero loans to black people for the
Speaker 1: last fifty years. That data is getting entered into the system.
Speaker 2: I just don't see how he would have gathered enough data.
Speaker 3: Enough banks would be willingly giving over people's information to
Speaker 3: collect data to make an algorithm to see exactly.
Speaker 2: How this works. Like, it's just it's all bullshit. I
Speaker 2: feel like it completely.
Speaker 3: And then and then the fact that we still use
Speaker 3: it though today, Like I understand trying to get a
Speaker 3: standardized metric system at least so that way we could
Speaker 3: try to eliminate discrimination and all of that, I'm totally behind.
Speaker 3: That problem is is now you've created a whole situation
Speaker 3: where it's just bullshit, it's fake.
Speaker 1: It is.
Speaker 3: And then people have to live their lives by this
Speaker 3: credit score and it doesn't affect the elite and the wealthy,
Speaker 3: it affects everybody else below that. And then we're all
Speaker 3: sitting here trying to pay off debt, but don't pay
Speaker 3: off too much debt, and you know, let's make sure
Speaker 3: don't open too many credit cards. My mom had a
Speaker 3: credit card.
Speaker 2: I'm glad.
Speaker 3: This is really random, but my mom had this Nordstrom
Speaker 3: credit card, which is a clothing company O North.
Speaker 2: She's had it since she's had it since she was
Speaker 2: I think sixteen or seventeen years old.
Speaker 1: So that's our longest line of credit.
Speaker 2: Yeah, longest line of credit. Right.
Speaker 3: Nordstrom's like two years ago, two or three years ago,
Speaker 3: they got bought out. Their credit system got bought out
Speaker 3: by another company, and they went and they raised their
Speaker 3: interest rates. I think it was like seventy nine percent
Speaker 3: or something obscene like it went from like fifteen percent
Speaker 3: to an obscene amount, don't I don't know the exact number,
Speaker 3: but I know it was like a crazy high high number.
Speaker 3: And my mom's like, I've had this credit card since
Speaker 3: I was sixteen, seventeen years old, and now I'm gonna.
Speaker 2: Have to close it. Her score dropped twenty three points
Speaker 2: because she closed that credit card.
Speaker 1: Only twenty three points. Yeah, Raven, Raven, it was.
Speaker 3: But for my mom, that hasn't eight hundred like she felt,
Speaker 3: so I think it was she felt some type of way.
Speaker 3: But she closed another card too, and that dropped even more.
Speaker 2: It dropped like a huge amount, and she was pissed
Speaker 2: the day. Paul and knew all this stuff.
Speaker 3: Yeah, but you got to understand old people feel some
Speaker 3: type of way about their credit score, especially when they
Speaker 3: work like all their life to have like an eight
Speaker 3: hundred plus, which is.
Speaker 1: Crazy because it wasn't even a thing until eighty nine.
Speaker 1: But like, okay, but no, look, I got divorced my
Speaker 1: first divorce, my credit score was over a seven hundred.
Speaker 1: The day my divorce got finalized, it dropped to a
Speaker 1: three point fifty.
Speaker 2: That's insane. Yeah, I know that my mom's dropped. I
Speaker 2: think a couple I mean, but when I was married
Speaker 2: and got divorced and stuff, mine dropped I think a
Speaker 2: hundred points yeahbe almost one hundred. And it had nothing
Speaker 2: to do with me either.
Speaker 1: Nothing, how it actually happened. It actually had nothing to
Speaker 1: do with you, Raven. It had everything to do with
Speaker 1: the predictive analytics and the risk management.
Speaker 3: I got divorced, and now I became a higher risk category, right, Yeah, yeah,
Speaker 3: that's what I thought. Yeah, because you're a because you
Speaker 3: don't have as study of an income.
Speaker 1: Because statistically, a woman living in your section of Louisiana
Speaker 1: who has recently divorced is more likely going to start
Speaker 1: defaulting on some loans that she has and missing some
Speaker 1: payments from time to time. That is what the FIICO
Speaker 1: decided arbitrarily. That has nothing to do with you personally,
Speaker 1: even if you have never missed a payment and even
Speaker 1: paid a little more each time and all that, that
Speaker 1: has nothing to do with your credit score at all.
Speaker 2: I actually didn't know any of this.
Speaker 1: I didn't either, which is why I'm fucking pissedl now.
Speaker 4: Yeah who.
Speaker 1: I had to calm down before I started this episode
Speaker 1: because as I'm as I learned all this and looking
Speaker 1: at what my credit score currently is, which I'm I'm
Speaker 1: guessing great.
Speaker 2: Now I'm gonna have to look at mine, God damn it.
Speaker 1: But be careful if you check it too many times,
Speaker 1: they'll also kid deed.
Speaker 2: I don't fucking understand this whole thing. It's because when
Speaker 2: you're easy, how Yeah, when you keep us down in every.
Speaker 1: Way, whenever you do a pull on your credit score,
Speaker 1: they the bureau sees it as the only reason somebody
Speaker 1: would pull this. You are allowed to pull it like
Speaker 1: once or twice a year for no reason in you're fine,
Speaker 1: But if you pull it too many times, they're like, oh,
Speaker 1: the only reason you would have had this pulled is
Speaker 1: if you were trying to get approved for a loan,
Speaker 1: And if we see no new debt to your name,
Speaker 1: but you pulled your credit score six times this past year,
Speaker 1: that must mean that you got denied four times for loans.
Speaker 1: So we're gonna go ahead and den you a couple
Speaker 1: points there. Yeah, man, I just looked at mine.
Speaker 2: I want to look at it.
Speaker 1: I warned you. I fucking warned you.
Speaker 2: Wow, that's that's rough.
Speaker 1: Good cult members, if you're listening, don't don't go do that.
Speaker 1: Don't go do that. Just do what you're supposed to do.
Speaker 1: Call one of these row companies that's supposed to help
Speaker 1: you with your credit score. They can look at it
Speaker 1: without it dinging you as an individual, look at it.
Speaker 2: On your you can leave it on your bank account,
Speaker 2: like Chase Bank. That's what I'm looking at. Chase Bank
Speaker 2: will tell you everything you want to know.
Speaker 1: They're pulling it from Equifax, huh, which is one of
Speaker 1: the three main top dogs in this country. And yes,
Speaker 1: if you pull that too many times, it's still going
Speaker 1: to hit you.
Speaker 2: I'm gonna cry right now.
Speaker 1: I'm sorry.
Speaker 2: Read the article. I'm gonna cry.
Speaker 1: So let's learn a little bit here from Carrington Labs
Speaker 1: about the role of predictive analytics in modern risk management
Speaker 1: and strengthening credit quality. Strengthening credit quality, predictive analytics drives
Speaker 1: could be your key to better credit quality, tackling rising
Speaker 1: critical criticized loans, and strengthening risk management in today's tough
Speaker 1: economic climate. In today's volatile economic environment, credit quality has
Speaker 1: become a growing concern for US lenders and financial institutions.
Speaker 1: Recent reports, such as those from the SMP Global show
Speaker 1: a significant rise in criticized loans, with some institutions nearing
Speaker 1: levels not seen since the Great Financial Crisis. These trends
Speaker 1: underline the pressing need for robust, proactive credit risk management
Speaker 1: to safeguard institutional stability and ensure regulatory compliance. Predictive analytics
Speaker 1: is emerging as a critical tool for addressing these challenges,
Speaker 1: providing lenders with actionable insights to navigate evolving risks and
Speaker 1: maintaining healthy portfolios. Essentially, it's saying that this is making
Speaker 1: it to where banks know to loan you or not
Speaker 1: loan you things based off the market value, not off
Speaker 1: of you as an individual. But let's read more credit
Speaker 1: quality challenges facing US lenders and financial institutions, because yes,
Speaker 1: the banks, they are in trouble. These financial institutions. They
Speaker 1: need help, y'all, they need your thoughts and prayers all.
Speaker 3: I love how they always when they talk about the
Speaker 3: national debt for the United States, it's like some g
Speaker 3: rano mass number like they threw out in the ether,
Speaker 3: and it's like, there's no actual tangible money. There's not
Speaker 3: like a mountain of gold sitting somewhere and a dragon's
Speaker 3: watching over it.
Speaker 2: And that's the amount that we owe. It's literally just like, yeah,
Speaker 2: you owe a couple trillion, It's whatever.
Speaker 1: No, Fort Knox is empty. We sold all that to
Speaker 1: Europe over the past couple of decades, which, as a
Speaker 1: matter of fact, we might even do a whole episode
Speaker 1: on that, by the way, because the movement of gold
Speaker 1: from point A to point B is something that can
Speaker 1: absolutely be tracked and has been tracked. And I feel
Speaker 1: like a lot of people we get we talk about
Speaker 1: that a lot like Fort Knox is empty. Our Boni's
Speaker 1: not gold backed anymore. But ba bop no, no, really,
Speaker 1: like America has.
Speaker 2: No gold like, so we just I don't want to understand.
Speaker 1: It's all fiat currency. It's all how our dollar is
Speaker 1: wagered against other dollars from around the world, off of
Speaker 1: other countries based off of how our economy and our
Speaker 1: GDP is doing and how the oil prices are looking.
Speaker 1: It has nothing to do with us.
Speaker 2: That's just crazy. Yeah, the whole money system in America
Speaker 2: is insane to me.
Speaker 1: Yeah, as of this moment, the US dollar is still
Speaker 1: top dog. It's still the international trade currency because of
Speaker 1: the petro dollar and all these things. It's great, we
Speaker 1: are we are closer now than we have ever been
Speaker 1: before to that being dethroned. And a lot of people
Speaker 1: will say it's because of crypto. A lot of people
Speaker 1: say it's because of bricks. A lot of people will
Speaker 1: say it's because of Trump. But there's multiple levels to that.
Speaker 1: There's not one solid answer. There's a few answers that
Speaker 1: all tie into one amalgamation of butt fuckery that has
Speaker 1: screwed us as far as our our finances are concerned.
Speaker 1: But that is a talk for another day. Good cult
Speaker 1: members stand by for the Fort Knox Being Empty episode.
Speaker 1: I've actually been wanting to do that for a couple
Speaker 1: of months, so I'll do it. I'll do a deep
Speaker 1: dive on that one here soon anyway. So again, the
Speaker 1: credit quality challenges facing the US lenders and financial institutions
Speaker 1: for yeah, for real, right, criticized loans defined as loans
Speaker 1: with potential weaknesses that could jeopardize repayment are becoming an
Speaker 1: increasing burden for banks. For banks, so a loan that
Speaker 1: has an issue with maybe this loan won't be re paid.
Speaker 1: That's bad for the banks, not the person who's getting
Speaker 1: their house foreclosed on, because again, the credit doesn't give
Speaker 1: a fuck. If you lost your job, got hurt and
Speaker 1: can't go to work, that they couldn't give a fuck less.
Speaker 1: It's all about your actionable debt, which we're gonna talk
Speaker 1: more about. Factors contributing to this trend include persistent inflation
Speaker 1: and its impact on borrowers' ability to meet obligations. Okay,
Speaker 1: this is accurate. Inflation goes up and people are having
Speaker 1: trouble making their payments fair enough. Rising interest rates putting
Speaker 1: pressure on debt servicing costs. That's the thing. Interest rates
Speaker 1: are high as fuck, and Trump's trying to fight that
Speaker 1: right now, but he's doing it in a way that
Speaker 1: could lead to mass inflation, which we talked about quantitative
Speaker 1: easing on the last episode of The Cajon Night, which
Speaker 1: we're not going to get into that, right now, but
Speaker 1: that's an accurate statement to say that interest rates are
Speaker 1: also screwing over the customer challenges and underwriting standards during
Speaker 1: periods of rapid loan growth housing bubble. Essentially, that's the
Speaker 1: housing bubble. Kind of a surmised into a one sentence statement.
Speaker 1: These challenges highlight the importance of taking more vigilant and
Speaker 1: forward looking approaches to credit risk management, where early identification
Speaker 1: of an at risk loan can mitigate potential losses. They're
Speaker 1: saying it's going to be hard to get loans because
Speaker 1: if it's too risky, they're just gonna say no. So
Speaker 1: why vigilant credit risk management is essential. Effective credit risk
Speaker 1: management goes beyond reactive measures. It requires a proactive strategy
Speaker 1: that leverages data to predict and address potential issues before
Speaker 1: they escalate, i e. Denying a loan before it gets
Speaker 1: approved so that the bank doesn't lose any money on
Speaker 1: the whole shebang. Vigilance is particularly critical in the current
Speaker 1: regulatory landscape, where institutions face heightened scrutiny and reputable risks
Speaker 1: tied to credit quality quality. Key components of robust credit
Speaker 1: risk management include real time monitoring of loan performance and
Speaker 1: borrower behavior. They're watching your dollars and they're watching your
Speaker 1: numbers to see up, down, left, right, how things are flowing.
Speaker 1: And not for you as an individual, for a lot
Speaker 1: of people that look like you, that make similar money
Speaker 1: like you, that live in the area that you live in.
Speaker 1: It's all about the the litmus test. It's like the
Speaker 1: biggest VENN diagram ever. So they're talking about real time
Speaker 1: monitoring all these things, which ties into data collection. We're
Speaker 1: gonna get to that in a bit, which I do
Speaker 1: believe ties into AI comprehensive portfolio segmentation to identify high
Speaker 1: risk segments, essentially noticing that, hey, you got this guy
Speaker 1: who's buying a bunch of toys. He just got him
Speaker 1: a good job and how hit paying industry, and he's
Speaker 1: buying a bunch of toys. But this is also seasonal work,
Speaker 1: and give it another eight months and he'll be out
Speaker 1: of a job, and all this shit's going to get,
Speaker 1: you know, repossessed, things like this, right. Adoption of advanced
Speaker 1: tools that integrate predictive capabilities to uncover emerging trends in
Speaker 1: borrower risk I e. Credit score.
Speaker 2: Yeah, that's crazy.
Speaker 3: I mean I looked up while you're talking about like
Speaker 3: risks for the banks and stuff. So from twenty from
Speaker 3: two thousand and one to twenty twenty six, five hundred
Speaker 3: and seventy banks.
Speaker 2: Have failed and closed. Yeah, and it's just talking about
Speaker 2: that since the seventies and another five hundred I guess
Speaker 2: have closed major factors due to economic recessions and financial crisis,
Speaker 2: mergers and acquisitions. It's talking about like the stability of
Speaker 2: the bank. The smaller banks, they can't handle loaning stuff
Speaker 2: out and them not getting paid back.
Speaker 1: Yeah, a lot of these mom and pop banks. And
Speaker 1: by mom and pop banks, I mean like, I don't know,
Speaker 1: let's just throw it out the first National Firefighters Credit
Speaker 1: Union or something, right, or you're a Red River credit
Speaker 1: union or or any of these little small financial institutions
Speaker 1: that might be local to you. Yeah, they might have
Speaker 1: four or five buildings, but it's not like this is
Speaker 1: a national bank or a national credit union or anything
Speaker 1: like that. Right when the financial crisis hit, a lot
Speaker 1: of these places got fucked hard, and then you had
Speaker 1: the capital ones, the Chase banks, right that would come
Speaker 1: in and would buy up these mom and pop shops
Speaker 1: in some big merger, some big acquisition. Whatever. The case was,
Speaker 1: and then realize that all these loans are really bad
Speaker 1: for their bottom dollars, so they just shut them down. Yeah,
Speaker 1: and that's how it works in the world a big business.
Speaker 2: It's crazy. Is that reminds me of like Amazon and
Speaker 2: Walmart and Target.
Speaker 3: Yes, exactly the same concept with businesses as it is
Speaker 3: with banks.
Speaker 1: Absolutely, but it's not a monopoly because if there's at
Speaker 1: least like two or three top dog banks out there
Speaker 1: that are competing quote unquote against each other, then it's
Speaker 1: not a monopoly for them to pull up and just
Speaker 1: shut down all the local mom and pop shops and
Speaker 1: then once everything's gone and they're the only bank in town,
Speaker 1: jack up interest rates to a level to where the
Speaker 1: people are fucked. That's not illegal because there is another
Speaker 1: bank you could go to. Yeah, I know. It doesn't
Speaker 1: all have to be tied into JP Morgan, although it
Speaker 1: pretty much all is tied into anyway anyway. So anyway,
Speaker 1: in a summary of this article, here the key takeaways.
Speaker 1: Number one, the risk in criticized loans highlights the need
Speaker 1: for proactive and vigilant credit risk management to safeguard institutional stability.
Speaker 1: They're saying that we need to lean more heavily into
Speaker 1: this arbitrary credit score that ain't got shit to do
Speaker 1: with you. Number two, Predictive analytics offer a powerful tool
Speaker 1: for identifying early warning signals, optimizing risk mitigation, and enhancing
Speaker 1: decision making. They're saying that the bank officers no longer
Speaker 1: have to rely on their intuition about if a bank,
Speaker 1: if a loan is going to be a good one
Speaker 1: or not. They could use this number to say, hey,
Speaker 1: I'm sorry I didn't approve you of the loan because
Speaker 1: you have a low credit score. And they're doing that,
Speaker 1: Like they said, an early warning signal, optimizing risk mitigation
Speaker 1: is to protect their own ass. That's all it's ever
Speaker 1: been about. And then number three, by adopting explainable AI
Speaker 1: and forward looking strategies, banks can strengthen credit quality, ensure
Speaker 1: regulatory compliance, and drive sustainable growth. Hey y'all, remember how
Speaker 1: we've been talking right for about a year now about
Speaker 1: how the AI is all actually just collecting your data.
Speaker 1: That's all it's actually about. It's about spying on you. Yeah,
Speaker 1: it's gonna get to a point, and it's already there,
Speaker 1: in my opinion, where the AI that's operating on your
Speaker 1: phone is watching every single app that you're on. They're
Speaker 1: watching your TEAMU orders, they're watching your Amazon orders. And
Speaker 1: keep in mind, this same data knows how much money
Speaker 1: you have in your bank account and what your average
Speaker 1: household income is on a monthly basis. They're gonna start
Speaker 1: using that along with everything else, to decide if you,
Speaker 1: as an individual, are a risky loan or not. And
Speaker 1: then they're going to compare it against the national average
Speaker 1: or the credit score. It's all tied together here.
Speaker 3: Well, what's interesting is you can actually go in and
Speaker 3: if you you use certain apps or you try to
Speaker 3: pay for certain things, they actually link your bank accounts
Speaker 3: to them. So like a firm or shop, you can
Speaker 3: link your bank accounts to it, and they actually monitor
Speaker 3: your bank accounts through the data collection, and it will
Speaker 3: it's easier quote unquote for you to pay, but it
Speaker 3: monitors everything that you're doing.
Speaker 1: And this is also why I've told so many people
Speaker 1: do not use Klarna or any of these other loan things. Listen,
Speaker 1: I know I use it a good bit. If you
Speaker 1: are in a position where you literally have to make
Speaker 1: this two hundred dollars expenditure happen and you have no
Speaker 1: other way. Basically, use Klarna as if it's a loan shark,
Speaker 1: that it should be your last resort. If you're using
Speaker 1: Klarna to put a Chipotle order on a payment plan.
Speaker 1: I can't express in words how fucked you're gonna be
Speaker 1: when you try to apply for an actual loan for
Speaker 1: a car, a house, or whatever, and they're going to say, hey,
Speaker 1: wait a minute. In twenty twenty five, you open sixty
Speaker 1: five individual lines of credit and how many of those
Speaker 1: did you actually pay off? Because how many people are
Speaker 1: thinking about that. Oh God, I forgot I bought you
Speaker 1: pote off of Klarina three months ago. I better pay
Speaker 1: that shit off before it gets reported. Clarina is reporting
Speaker 1: every single thing to the credit bureau everything.
Speaker 3: It's oh they they report everything, and you they they
Speaker 3: remind you and all the stuff. But you know they
Speaker 3: will report the shit out of you.
Speaker 1: So if you're gonna use Klarna or and that's just
Speaker 1: one example, there's there's a few, uh you know, small
Speaker 1: instant loan acceptance apps out there, and shit, if you're
Speaker 1: going to use it, use it as the same level
Speaker 1: as you're going to a mafia boss to get an
Speaker 1: amount of money because you have no other options. If
Speaker 1: you're using it to buy your lunch. Then we got
Speaker 1: we got problems, big problems.
Speaker 3: Yeah, it's it's tough because some of those things, like
Speaker 3: they like the affirm will give you a large amount
Speaker 3: of credit it, Yes they will, you like a seventeen
Speaker 3: thousand dollars credit line. Fuck yeah, they will, and they
Speaker 3: can give you it will give you cash pay, like
Speaker 3: if you need cash. It will be able to sync
Speaker 3: to your Apple Pay and you can use your Apple Pay,
Speaker 3: or you can use use it as like an Apple Pay,
Speaker 3: and you can request it however much you want. So
Speaker 3: you want three hundred dollars, then you add in the interest,
Speaker 3: so you do three fifty, and then whatever you don't
Speaker 3: use it just sits there. So yep, it's a smart
Speaker 3: way to help people in one way, but it's also
Speaker 3: another way to fuck you completely in the other on
Speaker 3: the back end.
Speaker 1: So exactly. So, now as we're talking about all these things,
Speaker 1: let's learn a little bit more about Bill Fair and
Speaker 1: Earl Isaac, the visionary founders of the Fair Isaac and
Speaker 1: Company aka FICO, the data analytics firm now known globally
Speaker 1: as FICO, the data analytics Firm. That's all FICO is
Speaker 1: it's not a credit bureau it's a data analytics firm
Speaker 1: that is being used by the credit bureaus.
Speaker 3: That's crazy. So we base our entire lives off of
Speaker 3: this thing that's not given okay.
Speaker 1: Has nothing to do enoughing, So the partner should do
Speaker 1: with something exactly the meeting at SRI. So Bill Fair,
Speaker 1: an engineer, and earl Isaac, a mathematician, met while working
Speaker 1: at the Stanford or Stanford Research Institute SRI in the
Speaker 1: early nineteen fifties. There's also some some conspiracy surrounding SRI.
Speaker 1: To be completely honest with you, the company launch was
Speaker 1: in nineteen fifty six. They founded their company with an
Speaker 1: initial investment of just four hundred dollars each. This is
Speaker 1: a small thing. They were just trying to crunch numbers
Speaker 1: to make loans dollars.
Speaker 2: They were able to change everybody's lives.
Speaker 1: For the forever essentially. And again, most banks didn't really
Speaker 1: do anything with this for a couple of decades because
Speaker 1: they saw it as it took power away from them.
Speaker 1: It took power away from their loan officers, it took
Speaker 1: power away from the and now anybody could get approved
Speaker 1: for a loan that could have some dangerous implications, you
Speaker 1: know what I'm sarreing. Especially, that was the mindset of
Speaker 1: the nineteen fifties original office. They began operating in a
Speaker 1: small studio apartment in San Rafael, California, right outside of
Speaker 1: San Francisco. The core philosophy their business was built on
Speaker 1: the then radical idea that data and mathematical algorithms could
Speaker 1: improve business decisions by making them more objective and consistent.
Speaker 1: Right there there. Again, I don't think they had the
Speaker 1: intention of fucking anyone over They were saying, like, so
Speaker 1: you got this guy who has never done anything wrong,
Speaker 1: but he just got denied alone over here. And you
Speaker 1: got this other guy who he's getting approved for everything
Speaker 1: even though he defaults on stuff, but his buddy is
Speaker 1: the bank teller. Like, we've got we gotta find some
Speaker 1: way to standardize this and try to make it equal.
Speaker 1: I don't think they set out to fuck people, at
Speaker 1: least not in the onset, but as all good things do.
Speaker 1: Let and you know, let's let's go a little bit
Speaker 1: deeper into at least one of them. So William Fair,
Speaker 1: this is actually his obituary. I'm not going to read
Speaker 1: the entire thing, but this is also pretty impressive, so
Speaker 1: his company began in nineteen fifty six as Fico Right.
Speaker 1: He was an engineer, and we talked about earl Isaac.
Speaker 1: Over the years, the company gained success by providing analytics,
Speaker 1: software services, and Fico Scores, the most used credit scores
Speaker 1: in the world, not the US, the world, to help
Speaker 1: financial service companies decide how to do business. Customers included
Speaker 1: credit card issuers, banks, retailers, auto companies, and utilities. Its
Speaker 1: early success included work with Conrad Hilton, who hired Fiko
Speaker 1: to design, program and install a billing system for Carte
Speaker 1: Blanche in nineteen fifty seven, a nineteen sixty three job
Speaker 1: from Montgomery Ward building a credit scoring system for that
Speaker 1: department store chain. Fair moved his company in nineteen sixty
Speaker 1: one to San Francisco's Financial district and in the nineteen
Speaker 1: seventies worked with the Connecticut Bank and Trust and Wells Fargo,
Speaker 1: among other firms. In nineteen seventy seven, the company implemented
Speaker 1: the first credit scoring system at a European bank, and
Speaker 1: five years later opened its first European office in Monaco.
Speaker 1: Of course it was Monaco, I know. Between nineteen sixty
Speaker 1: and his retirement in nineteen ninety one. Fair served as
Speaker 1: president of his company and later as chairman and technical
Speaker 1: consultant to his firm and subsidiary, Dyna Mark, Inc. The
Speaker 1: year he retired, the company made its credit bureau risk
Speaker 1: scores available to at all three major US credit reporting agencies.
Speaker 1: We're going to talk about those here in a bit.
Speaker 1: That's the Equifax and the TransUnion, all the things.
Speaker 2: Anyways, So well, I mean, Wells Fargo is under a
Speaker 2: lot of scrutiny too because of the scandal with the
Speaker 2: the causes and consequences, the fake account scandal, with the.
Speaker 3: High pressure sales culture that led to the widespread fraud
Speaker 3: and massive fines in corporate reform. Yep, it happened last
Speaker 3: year in December and December twelfth, I think is when
Speaker 3: it around that time. Well here is Wells Fargo bank
Speaker 3: accounts scandal involved creation of millions of consumer accounts services
Speaker 3: without consumer knowledge or consent over a period of years.
Speaker 3: The widespread misconduct under sorry, I can't see what these glasses.
Speaker 1: I get it?
Speaker 2: Where am I public trust?
Speaker 3: And expose a toxic internal culture driven by aggressive sale targets.
Speaker 3: The fallout led to a massive financial appenalties and sweeping
Speaker 3: regulations overnight that started. So yeah, they got in trouble, big, big,
Speaker 3: big time, because from two thousand and two to twenty sixteen,
Speaker 3: there was like three point five million potential unauthorized accounts
Speaker 3: that were created that were checking savings, credit cards, et cetera.
Speaker 3: And it was all used to drive up the cross
Speaker 3: sailing and strategy to be able to change the algorithms
Speaker 3: and data collections, and they use phony information.
Speaker 2: There's actually a lot of it. There's a lot of.
Speaker 3: Scandal around Wells Fargo itself. Actually that was my first
Speaker 3: bank I ever had, and I had for like decades.
Speaker 1: So there's gonna be some chicanery anytime you've got that
Speaker 1: level of money being moved from point to point B.
Speaker 1: So any of them, Honestly, I wouldn't be surprised if
Speaker 1: Capital One and Chase and all these other big dogs
Speaker 1: also have a long list of skeletons in the closet
Speaker 1: so to space.
Speaker 3: Well, you know Zell, right, uh huh transfer Zell. So
Speaker 3: I'll give a little back story of this because I
Speaker 3: actually went I actually had an open investigation with the
Speaker 3: police about Zell and Chase Bank. So a few years
Speaker 3: ago I got a phone call that was from a
Speaker 3: Chase number. It was actually the Chase bank number. It
Speaker 3: was not it was actually it was a person. And
Speaker 3: so they went through the entire fraud thing. Now, I've
Speaker 3: called the fraud company of the fraud department before many times,
Speaker 3: so I kind of already had an idea of what,
Speaker 3: you know, they're gonna ask me all the things they
Speaker 3: called me because I had just tried to make a
Speaker 3: purchase five minutes prior and I got flagged with a
Speaker 3: fraud alert. They called me using the bank number, and
Speaker 3: I was like, okay, went through all the steps, the
Speaker 3: same steps that you always go through. They already had
Speaker 3: my bank account information. They already had my bank account
Speaker 3: number and everything. And I was really leary because they
Speaker 3: were like, look, we need to transfer this money. I
Speaker 3: happened at the time. I had just gotten a paycheck
Speaker 3: and it was like a thousand dollars and they're like,
Speaker 3: we're gonna have to transfer this thousand dollars out of
Speaker 3: this bank account because you're already flagged for fraud. Now
Speaker 3: multiple times, which I did, I could see on my
Speaker 3: thing I was hit with fraud.
Speaker 2: Well, they had hit my actual score with.
Speaker 3: Fraud, and so they transferred it via ZEL, the first
Speaker 3: time I've ever used ZEL, and I had never used it.
Speaker 3: I didn't really know much about it, and they supposedly transferred.
Speaker 3: I had two bank accounts, and I was like, well
Speaker 3: I could.
Speaker 2: They're like, you need to do this. Long story short.
Speaker 2: I was really stupid.
Speaker 3: I was really high stress that day, and it was
Speaker 3: just one of those things of like I'm listening, but
Speaker 3: I'm not fully listening. I realized within five seconds of
Speaker 3: it happening. I was like no, like this is fake.
Speaker 3: And I was like, no, I do not give you authorization.
Speaker 2: Blah blah blah. They hung up on me.
Speaker 3: I called right away to Chase Bank, and I actually
Speaker 3: went and drove into the Chase Bank. I happened to
Speaker 3: be right down the street, and they both on the
Speaker 3: phone and in bank told me there's nothing they could
Speaker 3: do about it, because if you actually go and read
Speaker 3: all the information when you sign click that button about
Speaker 3: zell and you call the numbers that are associated, they're
Speaker 3: all offshore bank accounts, banking facilities. There's no one to
Speaker 3: actually talk to. There's no one that's actually running it.
Speaker 3: It's being filtered through offshore accounts via the big corporations,
Speaker 3: And when I went to the police station and filed
Speaker 3: a report because I was like, look, if you're not
Speaker 3: going to help me, and this was literally a minute ago,
Speaker 3: and you're not going to do anything to stop the
Speaker 3: money from being taken out of my bank account because
Speaker 3: they could stop it. They easily could have clicked the
Speaker 3: button yea and stopped it before it went out, and
Speaker 3: I actually traced back like where it was going is
Speaker 3: going to a California location.
Speaker 2: It hadn't processed all the way through. They refused to
Speaker 2: do it.
Speaker 3: So when I talked to the police and the fraud
Speaker 3: department and all of that, they told me that they
Speaker 3: believe that the banks are actually stealing money from people
Speaker 3: and they're removing it and taking it and filtering it
Speaker 3: into other things, because I'm not the first person that
Speaker 3: they've had that actually explored the numbers inside of the
Speaker 3: thing that you actually signed, because I was calling all
Speaker 3: the numbers. I sat on the phone and it's total
Speaker 3: offshore accounts. There's no one on the other end to
Speaker 3: really help you do anything. And the guy, the police officer,
Speaker 3: was like, you're not the first and not going to
Speaker 3: be the last. We really do believe that some of
Speaker 3: the banks are actually stealing money from the people, and
Speaker 3: because they're using Zell, you sign a document that like
Speaker 3: they're not liable, they're supposed to be. They're supposed to
Speaker 3: be so in certain states they're supposed to be able
Speaker 3: to pay you back. I think up to five thousand
Speaker 3: dollars that you can prove that was fraud and all
Speaker 3: of this stuff. There's certain there's like an act and
Speaker 3: people went after it, and you can look up YouTube
Speaker 3: videos about it. But the vast majority of people are
Speaker 3: having money stolen from them, and they believe that the
Speaker 3: banks are stealing it and they're using Zella as the
Speaker 3: whole as the gimmick.
Speaker 2: Pretty much.
Speaker 1: Oh, I believe that one hundred percent. And I have
Speaker 1: a hard I got a feeling here, Like you said,
Speaker 1: state to state, Louisiana is the only state that operates
Speaker 1: under Napoleonic law. So I have a weird feeling that
Speaker 1: you did not, in fact get that money back.
Speaker 3: I never got the money back. Chase Bank was pretty
Speaker 3: much just like suck. Yeah, you know, the actual cause
Speaker 3: so it went it could it was being transferred to
Speaker 3: a Bank of America supposedly, and the Bank of America
Speaker 3: fraud department. I actually talked to the manager of that
Speaker 3: was super helpful and was like, look, you're not the
Speaker 3: first person i've seen, and I can't physically stop this.
Speaker 2: I can't do anything. I can see your money.
Speaker 3: Coming to us quote unquote, and he's like, but if
Speaker 3: it disappears, He's like, I'm telling you it's going into
Speaker 3: offshore accounts because I can't even stop it even though
Speaker 3: I can see it, and I'm so sorry, and it's
Speaker 3: a whole underbelly scheme. And ever since then, I just
Speaker 3: don't use Zell for that reason alone. But I will
Speaker 3: say that when I really dug deep into it, I
Speaker 3: believe that the money is being funneled for other purposes,
Speaker 3: and it's being taken from US normal citizens and used
Speaker 3: for whatever dot dot dot you want to look at
Speaker 3: it for through the banking systems.
Speaker 1: I think the last time I looked at the statistic,
Speaker 1: it was like, every second, isn't it ten Americans suffer
Speaker 1: some sort of fraud. I don't know it's a six.
Speaker 1: I forget what it was, but basically, every second there
Speaker 1: is bank fraud, whether it's with a credit card or
Speaker 1: whether it's your bank account or a transfer going wrong
Speaker 1: or whatever the case. Yeah, they are absolutely siphoning money
Speaker 1: off the American people. Now, some of that, you're right,
Speaker 1: is from offshore people that are scheming. Some of that,
Speaker 1: in my humble opinion, is being done by the American
Speaker 1: banking institution because, like we just heard about from Wells
Speaker 1: Fargo and then from other banks that are in serious
Speaker 1: financial dire streets right now, they got to make their
Speaker 1: money somehow, and it's not good. It's I mean, yeah,
Speaker 1: it's theft. It's all it ever is. But so is taxation.
Speaker 1: If we're gonna get on this, so, I mean, anyway, so, uh,
Speaker 1: let's talk about this now. This is a deep dive
Speaker 1: into the Fair Isaac Corporation, also known as FICO. So
Speaker 1: the Fair Isaac Corporation has achieved what few companies ever do.
Speaker 1: It's become practically synonymous with the service it provides. The
Speaker 1: ubiquitous FICO score underpins the vast majority of consumer lending
Speaker 1: decisions in the US, giving FICO a toll booth like
Speaker 1: position in the credit ecosystem. This entrenched role, coupled with
Speaker 1: the savvy management and high margin business model, has turned
Speaker 1: FICO into a profit machine for long term shareholders, which
Speaker 1: is very true. They are the spot. There's yeah, they
Speaker 1: quote unquote have their subsidies and these other three that
Speaker 1: we'll talk about in a bit, but it all basically
Speaker 1: goes through Fico. Right, It's like what was it when?
Speaker 1: Was it Vanderbilt or was it Morgan who basically whenever
Speaker 1: the monopoly laws came into play they forced him to
Speaker 1: break apart. Or maybe it was Dale Carnegie. Honestly, whenever
Speaker 1: the monopoly laws came into play, he was forced to
Speaker 1: break up. Oh it was oil, it was it was
Speaker 1: Standard Oil. They forced him to break up his business
Speaker 1: into ten other businesses, but they didn't say anything about
Speaker 1: him having a controlling interest in each of these businesses.
Speaker 1: So he turned one business into ten businesses, all of
Speaker 1: which he owned and operated, not a sole prietorships. They
Speaker 1: were on boards, but he owned majority shares. So essentially,
Speaker 1: the government forced him to make himself even more fabulously
Speaker 1: wealthy than ever before and was able to make it
Speaker 1: go more diverse and more illegal. So it's basically the
Speaker 1: same thing that FICO has done.
Speaker 3: Well.
Speaker 2: Fiico is in bed with Blackrock, Oh, yes, cooperate.
Speaker 3: They collaborate on financial analytics and risk manament management.
Speaker 2: Solutions.
Speaker 3: Their leadership extend includes the executives that work both for
Speaker 3: Fiico and Blackrock, focusing on strategy partnerships. The companies operate independently,
Speaker 3: but leverage each other and use uses their strength and
Speaker 3: financial technology. Their joint efforts aim to enhance decision making
Speaker 3: in credit, risk management and investment strategies. Also, when I
Speaker 3: looked up really quick about you know, total loss for
Speaker 3: fraud last year. So in twenty twenty two, it was
Speaker 3: eight point eight billion, in twenty twenty three it was
Speaker 3: ten billion, in twenty twenty four it was twelve point
Speaker 3: five billion, and in twenty twenty five it is still
Speaker 3: rising because they haven't finished out the quote, but it
Speaker 3: was that sixteen point two is where they're estimating it.
Speaker 1: We have three hundred and sixty million Americans and we
Speaker 1: have sixteen billion loss to fraud.
Speaker 3: They're still determining it right now, but we'll use twenty
Speaker 3: twenty four's solidified number, which is twelve point five billion dollars.
Speaker 2: Just a fraud.
Speaker 1: But that's my point. So essentially six million.
Speaker 2: Six million people. Wait is that million?
Speaker 3: Yep, six million people in twenty twenty four over six million,
Speaker 3: it was almost seven million.
Speaker 1: So continuing on. It says Fiico's dominance and credit scoring
Speaker 1: and analytics provides a robust mote that should persist over
Speaker 1: the next three years, supported by steady growth in its
Speaker 1: core scoring business, expanding adoption of its decision software platform,
Speaker 1: and pricing power that has proven willing to flex. The
Speaker 1: company's strengths and industry standard product, deep integration with customers,
Speaker 1: hefty cash flows position it well to continue compounding value.
Speaker 1: So basically they're saying that it's going to keep going
Speaker 1: up no matter what you do. That said, strategic challenges
Speaker 1: are on the radar. A competing credit score is slowly
Speaker 1: making in roads. This would be called Vantage Score. This
Speaker 1: is Fico's competition. Finally they have another group that's willing
Speaker 1: to combat them in some way, shape or form. But honestly,
Speaker 1: it's it's more of the same. It's not better for anyone.
Speaker 1: It's doing the exact same thing that Fiico does, just
Speaker 1: taking data for people just like you and doesn't take
Speaker 1: you into account as an individual. But anyway, it's slowly
Speaker 1: making in roads. Regulators are eager to foster more competition,
Speaker 1: and Fiico's valuation already reflects high expectations. Despite these caveats.
Speaker 1: I view Fico as a confident long term hole for
Speaker 1: the three year horizon. It's a unique franchise that has
Speaker 1: repeatedly proven its resilience and ability to innovate. The stance
Speaker 1: here straightforward, stay invested for the long haul, but keep
Speaker 1: an eye on the emerging risks that could test Fiico's fortress.
Speaker 1: This was published March of last year. Fiico hasn't lost
Speaker 1: anything like at all. So the background up we talked
Speaker 1: about Bill Fair and Earl Isaac. We talked about how
Speaker 1: they got started here and an era wind loans were
Speaker 1: approved based on personal judgment and a handshake institution. Fair
Speaker 1: in Isaac's analytic approach was a bold gamble early on
Speaker 1: the customer or. The company built custom scoring systems for
Speaker 1: individual lenders, crunching numbers on borrowed IBM computers to predict
Speaker 1: who would repay alone. These efforts gradually succeeded the concept
Speaker 1: of credit scoring in American finance by nineteen eighty nine. Again,
Speaker 1: nineteen eighty nine, Fico introduced the first general purpose FICO score,
Speaker 1: a three digit number that could encapsulate a person's credit risk.
Speaker 1: It was an instant hit. Lenders car craved a quick,
Speaker 1: objective way to evaluate borrowers, and FICO delivered. Yeah, the
Speaker 1: banks weren't like super jazzed again, but they also saw
Speaker 1: this as a great way to have some sort of
Speaker 1: a legal shield to protect their lending institutions from lawsuits
Speaker 1: for you know, who got denied alone and for what reason.
Speaker 1: A inflection point came in nineteen ninety five when a
Speaker 1: US mortgage giants you probably heard of them, Fannie May
Speaker 1: and Freddie Mack, endorse the FIGHTO scores for virtually all
Speaker 1: home loans they purchased. From that moment, Fighto's score became
Speaker 1: the de facto passport to credit in America. By the
Speaker 1: year two thousand and estimated seventy five percent of all
Speaker 1: mortgage applications were being decided with a FICO score. So
Speaker 1: it went that quickly crazy. From eighty nine to ninety five,
Speaker 1: it went from becoming a standardized thing to being what
Speaker 1: you would need to get a home loan. By two thousand,
Speaker 1: it was pretty much all you needed. Then we had
Speaker 1: the housing bubble happen, and now the good luck getting
Speaker 1: a home loan without a credit score. Good good fucking luck.
Speaker 1: But anyway you can't, no way, there's no fucking way.
Speaker 2: You can't get a car, You can't get anything. You
Speaker 2: have to have a credit score.
Speaker 1: Unless you're paying cash, unless you are coming with cash
Speaker 1: in hand.
Speaker 2: Than fun, I'm pretty sure you still have to have
Speaker 2: a like you still have to have a certain amount
Speaker 2: of credit score.
Speaker 1: I don't know, honestly, I've never bought a car out right.
Speaker 2: I'm I feel like you're supposed to have a specific
Speaker 2: at least some type of credit score. I don't know.
Speaker 2: That's maybe.
Speaker 1: As Fiico's influence grew, its business evolved, which started as
Speaker 1: a niche consulting outfit, morphed into a software scoring powerhouse.
Speaker 1: The company went public in nineteen eighty seven and rode
Speaker 1: a wave of adoption as banks, credit card issuers, and
Speaker 1: even government agencies embraced its tools. In a quirky anecdote,
Speaker 1: the IRS in the nineteen seventies used fiicos analytics to
Speaker 1: help identify tax evaders, illustrating how broadly applicable Fiico's model became. Yeah,
Speaker 1: the IRS and Fico, I know, as we're talking about
Speaker 1: the financial institutions. Oh, they have been intringed with each
Speaker 1: other since the seventies, even before credit scores became a
Speaker 1: widely used metric. The irs is already using Fico. Yeah so, anyway,
Speaker 1: through the nineteen nineties and two thousand, fair ISAAC, which
Speaker 1: eventually rebranded some as Fico, rolled out products beyond the
Speaker 1: classic credit score, from fraud detection systems for credit card
Speaker 1: transactions to marketing analytics that help banks cross sell to
Speaker 1: the right customers. But at its core, the Fico score
Speaker 1: remained the crown jewel. It seeped into American lexicon. What's
Speaker 1: your Fyco score? And now they don't even say that,
Speaker 1: it's just what your credit score, even though that's exactly
Speaker 1: what it means. It became a common phrase and customers
Speaker 1: began actively tracking that magic number. In twenty thirteen alone,
Speaker 1: lenders purchased over ten billion Fico scores to evaluate borrowers,
Speaker 1: a testament to how embedded Fyco's product had become twenty thirteen.
Speaker 1: And that's the thing. They're selling this to the banks.
Speaker 1: They're not giving this information, not giving these data analytics.
Speaker 1: They were running credit scores, which they had to pay
Speaker 1: Fico for. And all it is is arbitrary analytics that
Speaker 1: has nothing to do with the individual. It's just its algorithms.
Speaker 2: Oh my god, and everything is based on it.
Speaker 3: I didn't realize though, that everybody around you is impacting
Speaker 3: your credit story.
Speaker 2: I thought that was like a personal thing.
Speaker 1: No, no, it is everything other than you believe it
Speaker 1: or not.
Speaker 2: That's that's wild.
Speaker 1: So this is actually the fyco website right now. And again,
Speaker 1: Fico is not a lending institution. And again, before I
Speaker 1: started this research, I honestly didn't know. Fico is a
Speaker 1: lending analytics software company helping businesses in eighty plus countries
Speaker 1: make better decisions that drive higher levels of growth, profitability,
Speaker 1: and customer satisfaction. Not consumer satisfaction the bank who's using
Speaker 1: ficos satisfaction over eighty countries. So damn near half of
Speaker 1: the countries on Earth are using the fair and ISAAC
Speaker 1: companies numbers and analytics and data.
Speaker 2: So it's a global thing that they were impacting. Wow,
Speaker 2: that's yeah, just some off some bullshit numbers.
Speaker 1: So reading in here, it says powering decisions that help
Speaker 1: people and businesses around the world prosper FCO's roundbreaking use
Speaker 1: of big data and mathematical algorithms to predict consumer behavior
Speaker 1: has transformed entire industries. Goddamn right, it has. The company
Speaker 1: provides analytics, software and tools used across multiple industries to
Speaker 1: manage risk, fight fraud, build more profitable customer relationships. Again,
Speaker 1: by customer, they mean banks, not us, optimize operations, and
Speaker 1: meet strict government regulations. Many of our products reach industry
Speaker 1: wide at adoption, such as the FICO Score, the standard
Speaker 1: measure for consumer credit risk in the United States. Fyco
Speaker 1: Solution leverage open source standards and cloud computing to maximize flexibility,
Speaker 1: speed deployment, and reduce costs. The company also helps millions
Speaker 1: of people manage their personal credit health. By that, they mean,
Speaker 1: like you just did raven when you just pulled your
Speaker 1: credit score, that's all it was. Yeah, your bank just
Speaker 1: paid Fico for that number. Really, the banks don't have
Speaker 1: this just in house. They still have to use Fico
Speaker 1: for all of it. So every time you pull a
Speaker 1: credit score, Fico's getting a penny on the dollar on
Speaker 1: that on that information.
Speaker 3: Just be having a revolving credit score then, because like
Speaker 3: or just access to it, because you can go to
Speaker 3: your bank and it just is sitting there, You're able
Speaker 3: to just look at it. Now you can go into
Speaker 3: it and click on it and it'll break down some
Speaker 3: of the stuff and you get like messages actively from
Speaker 3: I think it's TransUnion that you get messages from, and
Speaker 3: that it tells you like, hey, you're laid on this, Hey,
Speaker 3: this got reported here.
Speaker 2: Hey this is this?
Speaker 1: I bet it's one of these three. Is it Equifax,
Speaker 1: Experience or TransUnion?
Speaker 3: TransUnion is normally the one that likes to talk to
Speaker 3: people the most. The other ones are more difficult to
Speaker 3: get a hold of. When you're trying to put like
Speaker 3: a freeze on your credit. Yeah, which is a whole
Speaker 3: thing in and of itself too, is you can put
Speaker 3: a you can call and put a freeze on your
Speaker 3: credit to avoid fraud. And so when you decide to
Speaker 3: do that, you can actually do a temporary one. You
Speaker 3: can do one where you call in and you can
Speaker 3: put it on and then you can release it for
Speaker 3: twenty four hours, and so in twenty four hours you're
Speaker 3: going to use it for some dot dot dot. There's
Speaker 3: a lot of different things that you can do. You
Speaker 3: can call them and talk to them about all sorts
Speaker 3: of stuff. I just happen to know because of that situation,
Speaker 3: I was really proactive and trying to not have fraud
Speaker 3: happen to me again.
Speaker 1: So here's the deal. Equifax, Experience, and TransUnion are the
Speaker 1: three major US credit bureaus or reporting agencies that collect
Speaker 1: your financial data like payment history, debts, and loans to
Speaker 1: create credit reports, which lenders use to assess your credit
Speaker 1: worthiness for loans, credit cards, and rentals, with each bureau
Speaker 1: maintaining slightly different information lending or leading to potentially varying
Speaker 1: credit scores. They are essentially your financial life, and you
Speaker 1: can get free copies of your reports annually, annually being
Speaker 1: once a year. Once a year you can get a
Speaker 1: free report without it dinging your credit right from each one.
Speaker 2: Hard It's a hard poll, is what it's called.
Speaker 1: But here's the deal. Here's how they generate your credit score.
Speaker 1: They use different algorithms like FCO or vantage score to
Speaker 1: calculate credit scores based on information in your reports, reflecting
Speaker 1: your credit risk. Again, very little of that has to
Speaker 1: do with you as an individual. All of it has
Speaker 1: to do with what the FICO algorithm told them.
Speaker 2: That's crazy.
Speaker 3: And then if you file bankruptcy, So you go to
Speaker 3: court and you file bankruptcy, there's like different chapters that
Speaker 3: you can file. Did you know that you actually still
Speaker 3: pay your monthly thing? And then the court is supposed
Speaker 3: to pay the companies, but a lot of times they don't.
Speaker 3: So even if you've been paying on time, the minium
Speaker 3: do and you decide, you know what, I'm too overwhelmed
Speaker 3: and I don't know if I'll be able to do this,
Speaker 3: and you go and you file a type of bankruptcy.
Speaker 3: You're still paying the bankruptcy court, but that money just
Speaker 3: kind of disappears into the ether if you don't go
Speaker 3: all the way through with it.
Speaker 1: It is a business move. That's why when people bring up,
Speaker 1: you know, Donald Trump file for bankruptcy four times, and
Speaker 1: it's like, okay, wait, wait, wait, wait wait one of
Speaker 1: his businesses declared bankruptcy four times. But that wasn't because
Speaker 1: it was a failed business venture. That was a play.
Speaker 1: That is what the wealthy elite do to get out
Speaker 1: of paying large sums. They pay a little bit here
Speaker 1: and there, and then they default and it goes off
Speaker 1: into the wind.
Speaker 3: Well, so no, the you still have to pay back
Speaker 3: these creditors, right, the creditors. You're paying the bank, you're
Speaker 3: paying the government the money that they're supposed to work
Speaker 3: with them to pay off all of this.
Speaker 2: And it's supposed to be a whole thing.
Speaker 3: I didn't, So there was a time when I looked
Speaker 3: into doing it, and I know some people that didn't
Speaker 3: go all the way through almost but they paid a
Speaker 3: bunch of money up front, like a couple thousand dollars
Speaker 3: upfront to continue paying the creditors.
Speaker 2: They sent the creditors a check for seven dollars or
Speaker 2: for no joke, a dollar twenty five.
Speaker 1: It was just some sort of payment, it didn't matter,
Speaker 1: it was in six months.
Speaker 3: But so that tanked their credit even worse then just
Speaker 3: having this quote unquote bankruptcy. So they pulled out last
Speaker 3: minute and they actually never went through the bankruptcy, but
Speaker 3: it still shows on their credit score today.
Speaker 1: But if it's after seven years.
Speaker 3: You've never got that never money, that money that they
Speaker 3: paid in never got given back to them, and it
Speaker 3: never got given to the credit score.
Speaker 2: The credit people.
Speaker 1: But if it's after seven years and it's no longer
Speaker 1: on your credit, but you still have to pay back
Speaker 1: that debt later on, but the instant even if you
Speaker 1: paid a one lump sum, now it's back on your
Speaker 1: credit and then it's it's yes, there's a process to
Speaker 1: this shit.
Speaker 3: And again charge off is the if you people can't
Speaker 3: pay the money that they're they owe. The charge off
Speaker 3: is where it's at. Yeah, really, so like the charge
Speaker 3: off is what the bank is willing to take. So, hey, look,
Speaker 3: I've paid this amount of money. I can't keep paying
Speaker 3: this twenty thousand dollars bill. What are you willing to
Speaker 3: take from me? In either I think it's either upfront
Speaker 3: or like three lump sums. What are you willing to
Speaker 3: take to get a least some money extracted from me?
Speaker 3: Then they'll charge you off and you can never open
Speaker 3: up a line of credit or credit card with that
Speaker 3: company again. And it says charge off on your report.
Speaker 3: But it's better than filing for bankruptcy. And there is
Speaker 3: a way to like actually work with them to pay
Speaker 3: that off instead of getting to where you're so screwed
Speaker 3: and you have all this debt that's behind and all that,
Speaker 3: because that actually hurts your credit score worse than if
Speaker 3: you just charge off the fucking thing.
Speaker 2: So it's it's a whole game.
Speaker 3: But nobody tells you about this, and nobody, I mean
Speaker 3: nobody even knows because you see all these different things
Speaker 3: that are happening with different people. Everyone's trying to do
Speaker 3: different things and I mean the bankruptcy conversation. It sounded
Speaker 3: so enticing when I was like in a real struggle
Speaker 3: in a point. Thankfully I didn't go through with it,
Speaker 3: But yeah, I know, I know a lot of people
Speaker 3: that have had to go through with those type of things.
Speaker 3: But the elites, they operate in their own system that
Speaker 3: doesn't apply. Whatever they do does not apply to us
Speaker 3: down below.
Speaker 2: So I don't think people realize that. The people are like, well,
Speaker 2: they do it, then why can't we do?
Speaker 3: Because my love, they're up here, yeah, up in the sky.
Speaker 3: Think of it like they're up in the sky and
Speaker 3: we're down here in the dirt. Like that's we're two
Speaker 3: different playing fields.
Speaker 1: Oh that's how they see it. That's for damn sure.
Speaker 1: And then again, oh yeah, weird.
Speaker 2: Nothing.
Speaker 1: They're not dealing with a Fico credit score. They don't
Speaker 1: have to worry about that, but we do. And there's
Speaker 1: pretty much no way to escape that. So Fico's fortune
Speaker 1: five hundred clients. Fiico's clients include more than half of
Speaker 1: the top one hundred banks in the world, not in
Speaker 1: the US, in the world, we are talking about the Rothschilds,
Speaker 1: we are talking about all these global banking conglomerates. All
Speaker 1: of them are using Fiico. More than six hundred personal
Speaker 1: and commercial line issuers in North America and Europe, including
Speaker 1: the top ten US personal line issuers, four hundred plus
Speaker 1: retailers and a general merchandisers, including one third of the
Speaker 1: top US retailers, are the top third of the top
Speaker 1: one hundred US retailers, ninety five of the one hundred
Speaker 1: largest financial institutions in the US, and all one hundred
Speaker 1: largest US credit card issuers and more.
Speaker 2: All of them, that's insane are.
Speaker 1: Using fight Goo. Yeah, because they see it as a
Speaker 1: way to streamline the approval or denial of loans in general.
Speaker 1: Which if it streamslines it time is money. It saves
Speaker 1: them money. It also gives them some sort of a
Speaker 1: legal shield in case someone tries to sue them for
Speaker 1: you know, unlawful practices or you know, discrimination or whatever else. Now,
Speaker 1: let's talk about the e CooA, the Equal Credit Opportunity Act.
Speaker 1: I pulled this up off of the Federal Trade Commission here,
Speaker 1: and just so we're all clear about what this is.
Speaker 1: This Act, Title seven of the Consumer Credit Protection Act,
Speaker 1: and I quote prohibits discrimination on the basis of race, color, religion,
Speaker 1: national origin, sex, marital status, age, receipt of public assistance,
Speaker 1: or good faith exercise of any rights under the Consumer
Speaker 1: Credit Protection Act. The Act also requires creditors to provide applicants,
Speaker 1: upon request, with the reasons underlying decisions to deny credit.
Speaker 1: The Dodd Frank Act added, among other things, a requirement
Speaker 1: that creditors provide two applicants a copy of all appraisals
Speaker 1: and other written valuations used in connection with the applicants
Speaker 1: application for the first lean loans secured by a dwelling. Okay,
Speaker 1: so here's the thing we need to take away on
Speaker 1: this one. All this meant is that they can't deny
Speaker 1: you based off of some arbitrary thing. They have to
Speaker 1: provide you with the reasons underlying their decisions to deny credit.
Speaker 1: This specifically is when the banks were like, wait a minute,
Speaker 1: those guys out in California, they made that number thing.
Speaker 2: What was that?
Speaker 1: It's a scale from three hundred to eight hundred, and
Speaker 1: we could just use that and it would take away
Speaker 1: all of the legal precedents to say, why this young
Speaker 1: black couple was denied a home mortgage, Well, that's because
Speaker 1: you have a low credit score. Well why do we
Speaker 1: have a low credit score where I make good money,
Speaker 1: I pay my bills, I do this allics, And you
Speaker 1: need to get with one of these credit bureaus and
Speaker 1: you need to try to up your credit score and
Speaker 1: come back to us in a couple of months and
Speaker 1: maybe we'll make something happen. You see what I'm saying.
Speaker 3: Yeah, yeah, that's correct. This is the crazy, crazy little
Speaker 3: thing that I didn't even know about. To be honest
Speaker 3: with you, and.
Speaker 1: Then to tie this in, are the credit bureaus selling
Speaker 1: your data? Yes, credit bureaus sell your data and this
Speaker 1: practice is legal under the Fair Credit Reporting Act. So
Speaker 1: whenever the credit bureaus report your data, not your payment,
Speaker 1: hit with your data to the local insurance companies and
Speaker 1: to local online sales groups and advertisement agencies and all
Speaker 1: of these things, this is all legal under the Fair
Speaker 1: Credit Reporting Act. It's all within the fine print here.
Speaker 1: They primarily sell it to lenders and other businesses. Other
Speaker 1: businesses for permissible purposes, that is, in quotations they uh
Speaker 1: such as evaluating applications for credit insurance or employment, and
Speaker 1: for marketing offers to you have been pre screened for.
Speaker 2: So how do you think this is going to tie
Speaker 2: into the whole situation that's happening in the UK with
Speaker 2: them pushing for virtual money, Like they're just gonna get
Speaker 2: rid of the dollar pretty.
Speaker 1: Much, so it's gonna fuck them harder.
Speaker 3: It's because like if they're if they're using fico pretty
Speaker 3: much globally and they're basing all of our information off
Speaker 3: of people around us. What if you live in a
Speaker 3: high end area but you're super poor and the person
Speaker 3: next to you super rich, and the person on the
Speaker 3: other side of the median, Like, what what is that
Speaker 3: going to look like for all three of those families,
Speaker 3: Because it's going to just change screw up everybody's credit
Speaker 3: sucks the sac on top of that, they can shut
Speaker 3: this off, like what if you're too much of a risk, Okay,
Speaker 3: well just we're just gonna deny you food. Then I
Speaker 3: guess because you're not playing along in X, Y and Z,
Speaker 3: your political.
Speaker 2: Views are crazy. But don't worry, fyco. Your credit score
Speaker 2: is just shit because you know you haven't paid your
Speaker 2: bills correctly, and it's.
Speaker 1: Not even you. It might just be people in your
Speaker 1: quote unquote demographic that haven't paid their bills, your area,
Speaker 1: your race, your your age bracket, your line of work,
Speaker 1: whatever the case is, right, but don't worry Raven. Religion,
Speaker 1: it could be, but don't worry Raven. They have social
Speaker 1: programs funded by the state, So even if you can't
Speaker 1: afford to feed your family, don't worry. Uncle Sam will
Speaker 1: take care of You're in the UK, I guess jolly
Speaker 1: old King will take care of you. And it's just
Speaker 1: gonna be a thing where you're gonna rely more heavily
Speaker 1: on the state to afford everything, and you're gonna have
Speaker 1: to just suckle at the government's teat to survive. And
Speaker 1: that's the whole goal.
Speaker 2: So they can feed you like you know, bugs and
Speaker 2: slop and call it food.
Speaker 1: Yeah actually, yeah, yeah, it's like snow piercer.
Speaker 2: But like, we're not on a train.
Speaker 1: So how is your shit?
Speaker 2: So how do we really think about it?
Speaker 1: It's like hmm okay, So how is your data sold?
Speaker 1: The major credit bureaus Experience, TransUnion and Equalfax and inovis
Speaker 1: for anybody who uses that one collect vast amounts of
Speaker 1: personal and financial information and package it for sale to
Speaker 1: third parties trigger leads. So when you apply for a loan,
Speaker 1: a mortgage or auto loan, the inquiry on your report,
Speaker 1: triggers quote unquote the bureau to sell your information as
Speaker 1: a trigger lead to other lenders. These other companies then
Speaker 1: contact you with competing offers via phone, email, and mail.
Speaker 1: So there's pre screened offers like you talked about, and
Speaker 1: then there's other business purposes. But but how do you
Speaker 1: stop the sale of your data? There is opt out
Speaker 1: of pre screened offers. There is websites you can go to.
Speaker 1: There's phone numbers that you can call, and one of
Speaker 1: them is opt out prescreen dot com. There's a total
Speaker 1: free number as well. You can choose to temporarily opt
Speaker 1: out for five years or a permanent one. It requires
Speaker 1: mailing and assigned confirmation form. But you can fight the
Speaker 1: good fight and get your data to not be sold
Speaker 1: by your credit bureaus. But more often than not, people
Speaker 1: don't know about this. So for the vast majority of
Speaker 1: people experience TransUnion and equal effects have been selling your
Speaker 1: financial data, your address, your income, your all the things,
Speaker 1: all your shopping.
Speaker 2: Hair adventures.
Speaker 1: Oh yeah, all of it. Can they can sell?
Speaker 2: I mean like you can look.
Speaker 3: At Chase Bank will break down your expenditures and it
Speaker 3: will break it into categories and I'll give you like
Speaker 3: a nice little pie chart and give you all the
Speaker 3: sorts of stuff of you know, hey, you spent x
Speaker 3: amount of money on entertainment, you spent x amount of
Speaker 3: money on restaurants, you spent x amount of money on groceries,
Speaker 3: others this, that, and then Chase loves to sell your data.
Speaker 3: Oh yeah, because it links to all sorts of stuff
Speaker 3: and you can actually see where it talks. It tells you, hey,
Speaker 3: you know, we're sending this over here to optimize your
Speaker 3: consumer I forget the way they.
Speaker 1: Put it, but it's pretty much consumer profile.
Speaker 3: Yeah, your consumer profile, and it's this and that, and
Speaker 3: it's I mean, I get it. Like most people don't
Speaker 3: really give a shit because like, okay, they're tracking every
Speaker 3: single thing about us. But I wonder, as we're shifting
Speaker 3: into the age of serious AI potential control and everything's
Speaker 3: going to be linked together, and our entire lives is
Speaker 3: going to be linked to whatever we do via you know, spending,
Speaker 3: social score, political views, all of that.
Speaker 2: I wonder how much this FICO score is going to
Speaker 2: play into this.
Speaker 1: Oh, I think it's going to be heavily involved. Heavily involved.
Speaker 2: Maybe if the fifteen minute cities get up and running.
Speaker 2: They're going to move people into.
Speaker 1: Categories or they'll guarantee you. Basically, you moved into a
Speaker 1: fifteen minute city. Well there's an extra two hundred and
Speaker 1: fifty points on your credit.
Speaker 3: Score maybe if they can get put into certain locations.
Speaker 3: So like this is the eight hundred score area.
Speaker 2: This is this area.
Speaker 3: Like all of these scenes are driven, kind of like
Speaker 3: when you're in school and you get driven to want
Speaker 3: to get that A plus because you get actually you
Speaker 3: get a candy or you get five minutes extra at recess.
Speaker 3: So hey, if you do X, Y and Z, you
Speaker 3: get moved up in the bracket. This comes with these
Speaker 3: benefits and look you're in a fifty minute city. So
Speaker 3: then they all link together.
Speaker 1: Yep, it's smart.
Speaker 2: I'll give them that. It's really intelligent.
Speaker 1: So now let's go to park pocket guard here. When
Speaker 1: we're credit Scores invented a complete history of credit scoring. So,
Speaker 1: believe it or not, credit goes back, at least what
Speaker 1: we know of credits today actually goes back to the
Speaker 1: eighteen hundreds. The FICO score didn't come around to the
Speaker 1: nineteen fifties, but it's not the eighteen hundreds. In the
Speaker 1: way you would think it was like in eighteen forty one,
Speaker 1: and it was in England. But we're good to I
Speaker 1: was right though, you were right right. But like I said,
Speaker 1: credit score is different than credit.
Speaker 3: That's true, that's true. I knew credit though, was around
Speaker 3: the eighteen hundreds.
Speaker 1: So absolutely, So let's get into it here. So credit
Speaker 1: scores play a big role in our money lives today.
Speaker 1: The affect whether we get approved for home loans, car loans,
Speaker 1: or even apartments. But when did credit score start and
Speaker 1: what did people use before this system? Learning about the
Speaker 1: credit score history helps us understand how we move from
Speaker 1: personal opinions to computer based scoring. So when did they start?
Speaker 1: The first credit score came out in nineteen eighty nine. However,
Speaker 1: the idea of checking if someone could pay back money
Speaker 1: has been around much longer. The three big the three
Speaker 1: big credit reporting companies worked with Fico to create what
Speaker 1: we now call a credit score. The first widely used
Speaker 1: Fiico score was launched in nineteen eighty nine. We talked
Speaker 1: about that this change was huge for how banks looked
Speaker 1: at bar wars. Instead of making choices based off of
Speaker 1: personal feelings or biases, they started using number based systems
Speaker 1: that worked the same way for everyone allegedly, even though
Speaker 1: that's not exactly accurate. So what people used before credit scores,
Speaker 1: before credit scores existed, getting a loan was very different.
Speaker 1: What was used before them was a Lenders looked at
Speaker 1: things like what other people said about you, your payment record,
Speaker 1: your character, and sometimes they even visited your home. People
Speaker 1: who wanted loans had to meet with lender's face to
Speaker 1: face and try to convince them that they were trustworthy.
Speaker 1: This old way took a lot of time and had
Speaker 1: many problems. Decisions often depended on who you knew or
Speaker 1: social status, and sadly you're the race or gender. This
Speaker 1: made the system unfair for many people. So credit reporting
Speaker 1: started in eighteen forty one. So people tried to make
Speaker 1: this process better As early as eighteen forty one. After
Speaker 1: the money crisis of eighteen thirty seven, which happened partly
Speaker 1: because credit was too easy to get, Lewis Tappan or
Speaker 1: Tapin' I don't know, saw that businesses needed a better
Speaker 1: way to decide who invented credit decisions? Yeah, So in
Speaker 1: eighteen forty one he started Tapin's Mercantile Agency, the first
Speaker 1: credit reporting company in America. Before there was credit scoring,
Speaker 1: there was a business credit reporting. This was different from
Speaker 1: checking individuals individual people's credit risk. Business credit reporting helped
Speaker 1: store owners figure out if other businesses could pay their bills.
Speaker 1: In eighteen forty one, the Mercantile Agency asked people across
Speaker 1: the country for information to organize a bar wars quote
Speaker 1: unquote character and money. But this information was too personal
Speaker 1: and often showed unfair opinions about race, class, and gender.
Speaker 1: So why was the credit scores invented? We talked about
Speaker 1: that already, but you know, just giving it over here,
Speaker 1: getting rid of the old of the personal biases. Always
Speaker 1: of checking credit, we're heavily influenced by a personal relationship,
Speaker 1: social class, race, and gender. Credit scoring systems were built
Speaker 1: to make more fair and standard checks, making things faster.
Speaker 1: Checking credit by hand took too long and cost too
Speaker 1: much money. Automatic scoring systems let lenders handle applicants much
Speaker 1: faster and cheaper. I mean, think about that too. If
Speaker 1: you were a loan officer at a bank, and depending
Speaker 1: on the status of the loans that you were approving,
Speaker 1: you might only get two or three of those done
Speaker 1: in a day. Now, with a credit score, it's I
Speaker 1: mean as soon as you could pull that number and
Speaker 1: see if it's above a certain amount, then cool. If not, well,
Speaker 1: too bad. So sad, here's the print out. Get out
Speaker 1: of my office.
Speaker 2: I mean, the algorithm though, tells them yes or no, exactly.
Speaker 2: It's not even. It's not even not to the people anymore.
Speaker 2: They have no say.
Speaker 3: It's about the algorithm. It takes all of your information,
Speaker 3: it generates it through and then it decides if you're worth.
Speaker 2: It or not.
Speaker 3: Because it's gonna like if you buy a car, it
Speaker 3: tells them all three of the different scores and then
Speaker 3: it averages them out, and then it debates about if
Speaker 3: the then it gets sold to the banks in whichever
Speaker 3: bank decides that maybe you're worth it or not is
Speaker 3: the ones that will pick it up.
Speaker 2: And if there are no banks that are wanting you,
Speaker 2: then you don't get to buy a car.
Speaker 3: But some of the banks will be like, okay, i'll
Speaker 3: take it, but your interest rate is like sixty two percent,
Speaker 3: Like it's right, they can, and they'll bump the interest
Speaker 3: right up because of your credit score, because it's not
Speaker 3: good enough and you have stuff deming your credit report,
Speaker 3: and so.
Speaker 2: You know, it's it's a whole thing it is so.
Speaker 1: For anybody who didn't know. FICO scores ranged from three
Speaker 1: hundred to eight fifty. Higher numbers show better ability to
Speaker 1: pay back loans, and this scoring system has become the
Speaker 1: industry standard used in most lending decisions today, and not
Speaker 1: just on a personal level, even a business level. So
Speaker 1: do other countries have credit scores? We just talked about that.
Speaker 1: FICO is in eighty plus countries, but I'll bring a
Speaker 1: couple of them here. The United Kingdom uses credit scores
Speaker 1: from companies like Experience, Equal Facts and TransUnion, but with
Speaker 1: different number ranges. Canada has a similar system to the
Speaker 1: United States, but with their scoring ranges from three hundred
Speaker 1: to nine hundred.
Speaker 2: Germany uses other people had some do I know, I
Speaker 2: thought this was an American thing. I'm not gonna lie
Speaker 2: to you. I mean I felt like there was some
Speaker 2: type of something for other countries. I just didn't know
Speaker 2: that it was FICO in particular.
Speaker 1: Basically, I mean, but they they might call it something else,
Speaker 1: like for instance, in Germany they use SHUFA sc CHUFA scoring,
Speaker 1: but it's still using fika's data. So I mean, it
Speaker 1: is what it is, and it works differently from the
Speaker 1: US system, but it's still pretty much the same thing.
Speaker 1: It works a little different as far as the numbers
Speaker 1: are concerned. Australia has detailed credit reporting with multiple credit agencies,
Speaker 1: so again this is being used for uh. This is
Speaker 1: how credit scores changed modern life. Since they started in
Speaker 1: eighty nine, credit scores have completely changed how Americans get
Speaker 1: credit and financial services. They have become key factors in
Speaker 1: home loans, credit card applications, apartment riddles, insurance cost. Yes,
Speaker 1: your credit score matters in the realm of how much
Speaker 1: insurance you pay. Job screening. I have had my credit
Speaker 1: pulled multiple times when I got jobs for different plants
Speaker 1: and refineries. Yes, because they need to know. Oh yeah,
Speaker 1: because this this, and I had it broken down for
Speaker 1: me like this. The company needs to know if you're
Speaker 1: the type of guy or girl that goes out and
Speaker 1: makes a bunch of purchases that you can't back and
Speaker 1: now you're gonna be coming to work worried about other
Speaker 1: things other than work, or you're gonna be trying to,
Speaker 1: you know, take out loans and use certain things as collateral,
Speaker 1: or whatever the case. It seemed as very risky on
Speaker 1: a employment standard to have a bad credit score as well. Okay, yeah, okay,
Speaker 1: and utility deposits anyway, all right, moving on to the
Speaker 1: next thing. So this is what is in your FICO score.
Speaker 1: There's five category that they look into. Here, let's talk
Speaker 1: about it here. Thirty percent of your FYCO score is
Speaker 1: the amounts that you owe, ten percent is new credit,
Speaker 1: fifteen percent is length of credit history, ten percent is
Speaker 1: your maximum credit, and thirty five percent is your payment history.
Speaker 1: And again, some of that is per the individual, a
Speaker 1: lot of it goes more towards the demographic of the whole.
Speaker 2: I just don't see how they can use the demographic
Speaker 2: around you to influence your FYCO score a.
Speaker 1: Wild because it's easier that way, it's quicker. They don't
Speaker 1: have to pull they don't have to pull Jacob's total
Speaker 1: financial history from the time I was eighteen to now.
Speaker 1: They could pull some key factors from it. Sure, they
Speaker 1: could look at every loan that has my Social Security
Speaker 1: number attached to it, for sure, absolutely, But then when
Speaker 1: it comes back to you know, payment histories and the
Speaker 1: max credit and what's considered new credit, they're looking at
Speaker 1: different facts for that. These percentages aren't exactly as clear
Speaker 1: cut as as they might sound. Honestly. So let's see here,
Speaker 1: let's go down that buy Fico's own metrics.
Speaker 4: Here.
Speaker 1: This is myfyco dot com that I'm on right now.
Speaker 1: So payment history, Yeah, we're starting there. The first thing
Speaker 1: any lender wants to know is whether you've paid past
Speaker 1: credit amounts on time. This helps the lender figure out
Speaker 1: the amount of risk it will take on when extending credit.
Speaker 1: This is the most important factor in a FYCO score. Sure, sure,
Speaker 1: but again that is if you were making payments that
Speaker 1: were reported to the credit bureau. If you're renting from
Speaker 1: somebody who doesn't report it, then it doesn't matter the
Speaker 1: amounts owed. Having credit accounts and owing money on them
Speaker 1: does not necessarily mean you are a high risk borrow
Speaker 1: or with a low FICO score. However, if you are
Speaker 1: using a lot of your available credit, this may indicate
Speaker 1: that you are over extended, and banks can interpret this
Speaker 1: to mean that you are at a high risk of defaults.
Speaker 1: So let's say you're approved for ten thousand dollars worth
Speaker 1: of credit. You need to use it, otherwise it's going
Speaker 1: to look like inactive credit with that's not good. That's
Speaker 1: not going to generate income, that's not going to generate
Speaker 1: interest for banks. You can't have that. You need to
Speaker 1: use it, but you don't need to use nine thousand
Speaker 1: of that ten. Maybe use like one thousand of that
Speaker 1: ten and pay it off incrementally in these types of things,
Speaker 1: right anyway, length of credit history in general, having a
Speaker 1: long ait credit history is positive for your FCO score,
Speaker 1: but is not required for a good credit score. And
Speaker 1: of course that makes sense as well. They want to
Speaker 1: know if you're somebody who has participated in the economic
Speaker 1: system for a few years or a few decades. This
Speaker 1: matters credit mix. FIGHTO scores will consider your mix of
Speaker 1: credit cards, retail accounts, installment loans, finance company accounts, and
Speaker 1: mortgage loans. Don't worry, it's not necessary to have one
Speaker 1: of each. Well, thank fucking god, go ahead, no kidding,
Speaker 1: Like yeah, they want to know if you have, you know,
Speaker 1: all these different types of loans and different types of debt,
Speaker 1: or you just you know, you own your own your
Speaker 1: home outright, but you only have like two car loans.
Speaker 1: That's that's not a very diverse debt portfolio, you know
Speaker 1: what I mean. That's not good for business. And then
Speaker 1: new credit research shows that opening several credit accounts in
Speaker 1: a short amount of time represents a greater risk, especially
Speaker 1: for people who don't have a long credit history. What's
Speaker 1: crazy about that one is to get approved from my
Speaker 1: card note I had to take on a five hundred
Speaker 1: dollars credit card. Why did I have to open a
Speaker 1: small line of credit to get approved for my car loan? Well,
Speaker 1: it's because it helped your credit score. It's like, that's
Speaker 1: fucking retarded out loud. But they would not let me
Speaker 1: leave that lot until Capital want top prove me for
Speaker 1: a five hundred dollars card, which I'm not using. I
Speaker 1: don't need it. My credit score is fucked anyway, I
Speaker 1: just got forced whatever. But anyway, So now interesting, what's
Speaker 1: your thoughts on all this? Raven? Look like you're reading
Speaker 1: in on some I am.
Speaker 3: I'm listening to you, but I'm reading in on an
Speaker 3: article that says Fico Fire's back call Vantage Schooler and
Speaker 3: the credit Bureau a de facto monopoly. And it's from
Speaker 3: last year and apparently they felt some type of way
Speaker 3: about the mortgage company's decisions by using Vantage Score as well.
Speaker 2: And I was just reading.
Speaker 3: I just opened it, and so I was like, hmm, interesting,
Speaker 3: but it's it's talking about how the federal Housing Finance
Speaker 3: Agencies decided to sponsor and accept Vantage Score four point zero,
Speaker 3: and it was owned, it's owned by three major It's
Speaker 3: owned by the three major US credit bureaus, Experience, ECOFAX,
Speaker 3: and TransUnion, and so true, FIICO is pissed because they
Speaker 3: opened up their own shit and told FICO pretty much like,
Speaker 3: I guess we'll work with you if we have to,
Speaker 3: right right, Yeah, And so I was just kind of
Speaker 3: glancing through.
Speaker 2: I was trying to read what they said about it
Speaker 2: and stuff.
Speaker 1: But I don't think Fair and Isaac had that interest
Speaker 1: in mind. I honestly think that they might maybe maybe they.
Speaker 2: Were doing it for a good Who owns FICO?
Speaker 1: Now, Oh, they're a public trading company.
Speaker 3: Mm so, because when I was looking into it, Vanderberg
Speaker 3: they were talking about how they base their credit behavior
Speaker 3: that they work with FICO hand in hand on the
Speaker 3: credit behavior side. So black Rock works on the other
Speaker 3: side of it, Vanderberg being Vanguard and Vanguard excuse me,
Speaker 3: but ah, yeah, they work on the other part of
Speaker 3: it with the with a credit behavior aspect, and so
Speaker 3: they're kind of split between all of them. What they're
Speaker 3: doing with FICO and then Equo Facts, Experience and Transusion
Speaker 3: Union decided that they wanted their own, so they own
Speaker 3: vantage Score.
Speaker 2: It's a de facto monopoly.
Speaker 3: If anyone thinks that they're going to get going to
Speaker 3: lower pricing in the long term, it's just a mistake.
Speaker 2: They're going to have all the power, is what Fico
Speaker 2: said about.
Speaker 1: This in reality. In reality is because Fiko understands that
Speaker 1: this is their only comp petition, so they're trying to
Speaker 1: make it seem like they're evil.
Speaker 3: So it says and they are effectively going to be
Speaker 3: able to control not just Vantage Score and the credit
Speaker 3: report pricing, but they're going to be able to actually
Speaker 3: control Fiico Score and squeeze us out of the market.
Speaker 3: They will eventually be no choice in this market because
Speaker 3: they have actually become a facto and that is the
Speaker 3: mortgage professional American company that said that.
Speaker 1: Yeah, so it's a really it's shitty all the way around,
Speaker 1: And again I don't think that was what it was
Speaker 1: intended for, but that is what it has become.
Speaker 3: So yeah, I mean, they we so they charge interesting,
Speaker 3: so we are transparent about what our prices are and
Speaker 3: nobody else in this ecosystem is we charge ecosystem.
Speaker 2: We charge four.
Speaker 3: Point nine four dollars and ninety five cents as royalaty
Speaker 3: fees for the fight Go score, and that's where the
Speaker 3: transparency starts and ends in terms of approximately one hundred
Speaker 3: and twenty dollars credit report costs. It is if it
Speaker 3: is try management that one hundred and twenty four dollars,
Speaker 3: we are fourteen dollars and eighty five cents. So the
Speaker 3: vast majority of eighty five percent of the cost is
Speaker 3: not coming from FICO. So they're pretty much arguing that
Speaker 3: trans that vantage point is going to take over everything,
Speaker 3: force FICO to cause to increase their rates of how
Speaker 3: much it is to actually get it, and then they're
Speaker 3: going to squeeze out everybody else overall.
Speaker 1: I believe it one hundred percent. Actually, now the credit
Speaker 1: bureaus have decided they don't want to use FICO anymore
Speaker 1: because they could just keep that shit in house and
Speaker 1: make that money for themselves. Yeah, that's that's asa.
Speaker 2: They're still utilizing FICO in a way and forcing their
Speaker 2: hand to raise their costs.
Speaker 1: Yeah, that's crazy. So now we're going to cut over
Speaker 1: to a video from the One and Only King Trout
Speaker 1: and if you haven't checked him out. I highly recommend him.
Speaker 1: I love this dude's content, but he's going to kind
Speaker 1: of round out this episode for us and tell us
Speaker 1: a little bit more about the whole system, if you will.
Speaker 4: Millions of Americans were now in digit files, and in
Speaker 4: nineteen eighty nine, nineteen eighty nine, less than forty years ago.
Speaker 4: Everybody thinks credit scores have been around for eternity. Nope, no,
Speaker 4: like your grandpa was born before credit scores existed anyway.
Speaker 4: In nineteen eighty nine, Fiico convinced these three companies to
Speaker 4: standardize the score that they evaluated you with, not because
Speaker 4: it was the best or made the most sense, but
Speaker 4: because it was the easiest to scale, and bing bang boom, Overnight,
Speaker 4: a private company's imaginary, made up number became the gatekeeper
Speaker 4: to determine whether or not you can get a mortgage,
Speaker 4: or a car, or an apartment or some jobs. There
Speaker 4: was no vote held, no law was enacted, and there
Speaker 4: was no public debate, just spreadsheets. Credit scores didn't rise
Speaker 4: to prominence because they're fair. They rose to prominence because
Speaker 4: they made it easier and more streamlined for banks, insurers, corporations,
Speaker 4: and landlords to streamline the process by which they approve
Speaker 4: or deny you. They turned financial life into something that
Speaker 4: could be automated, controlled, and monetized. Your FYCO score uses
Speaker 4: five major weighted categories your payment history, your credit utilization,
Speaker 4: the length of your credit history, your credit mix, and
Speaker 4: your new credit. But inside those categories are hundreds of
Speaker 4: sub variables. Time since your last miss payment, size of
Speaker 4: that last miss payment, your balance relative to your limit,
Speaker 4: the velocity at which you spend money, and hundreds of
Speaker 4: other variables. Also, the model doesn't care if you've paid
Speaker 4: your rent on time every month for the past twenty years.
Speaker 4: If your landlord wasn't reporting it to the bureau, it
Speaker 4: never happened. The thing that most people don't seem to
Speaker 4: understand is that these credit scoring systems do not want
Speaker 4: zero debt. They want active, predictable, interest generating debt. If
Speaker 4: you pay off all your cards, your utilization goes to zero,
Speaker 4: your activity drops, and your profit profile disappears, which to
Speaker 4: the model that looks like risk Because inactive debtors don't
Speaker 4: make them money. You're rewarded for being in debt responsibly,
Speaker 4: and that is why people like me who do not
Speaker 4: maintain debt and buy nearly everything.
Speaker 1: With cash that I actually have.
Speaker 4: That's right, I don't have a credit card.
Speaker 1: I never have.
Speaker 4: People like us have credit scores live in the pod,
Speaker 4: eat the bugs, stay in forever. Debt credit models aren't
Speaker 4: simple formulas. They use logistic regression, survival analysis, machine learning models,
Speaker 4: and cohort behavior tracking. They're working off the history of
Speaker 4: millions of borrowers. What do all of those fancy words
Speaker 4: that I just said mean? Basically, in summary, your credit
Speaker 4: score isn't necessarily determined by your behavior. A lot of
Speaker 4: it is determined by the behavior of people who they
Speaker 4: have decided these agencies have decided are mathematically similar to you.
Speaker 4: And that's why it can get pretty funny. You and
Speaker 4: someone else can do the exact same thing, and one
Speaker 4: of your credit scores goes up and the other goes down.
Speaker 1: Why.
Speaker 4: Well, because you're in different cohorts, your risk groups are different,
Speaker 4: your statistical twins behave differently, and the system isn't tracking
Speaker 4: what you did, it's tracking what people statistically similar to
Speaker 4: you are likely to do next. The credit scoring models
Speaker 4: are also proprietary. This means you can't audit them. You
Speaker 4: can't really know what's actually taking place. Behind the scenes.
Speaker 4: There's no meaningful way the challenge any errors, and you
Speaker 4: can't prove discrimination. You're judged by a system that you're
Speaker 4: not allowed to understand. Slave to the financial algorithm. Credit
Speaker 4: scores whenever about helping people. That are about scaling debt,
Speaker 4: reducing lender risk, automating social sorting, and turning your financial
Speaker 4: life into a data pipeline. Your future is decided by
Speaker 4: a probability curve, not because you're bad, but because an
Speaker 4: equation decided that somebody like you once was, stay in
Speaker 4: debt forever and consume, consume, consume. It's good for the economy.
Speaker 1: I do, in fact love King Charles's content, and he
Speaker 1: was not wrong on any of the things that he
Speaker 1: just listed. Just are all clear here. So with all
Speaker 1: that being taken into account, here you see what I'm
Speaker 1: saying that your credit score actually, yes, some of it
Speaker 1: has to do with you, but primarily it has to
Speaker 1: do with the statistics of other people that fall into
Speaker 1: a certain demographic that you had no say so in.
Speaker 3: That's wild to me. I had no idea. I really
Speaker 3: thought this was solely just a you thing. That's what
Speaker 3: I least was taught. I mean, I felt like I
Speaker 3: opened up a bank account when I was fourteen. I
Speaker 3: got my first credit card when I was fifteen, because
Speaker 3: I started working when I was fourteen, and so I, like,
Speaker 3: I would charge one hundred dollars and then I would
Speaker 3: pay it down over two times. And I would do
Speaker 3: that because I was supposed to build my credit. So
Speaker 3: you know, that's that's what I was taught to do.
Speaker 3: I didn't realize that I went off everyone around me too.
Speaker 3: I figured it was just, you know, solely me, I'm
Speaker 3: in control. But I never understood when I got divorced
Speaker 3: why my credit score drops so significantly versus being married.
Speaker 2: I just didn't understand. I was like, I didn't open
Speaker 2: anything up, we didn't charge.
Speaker 3: You know, you're not alloted of charging thing or do
Speaker 3: anything while you're going through the divorced proceedings.
Speaker 1: So yeah, the fuck. But it had nothing to do
Speaker 1: with that, believe it or not. It had everything to
Speaker 1: do with other people like you in your tax bracket
Speaker 1: in your area of the country who are recently divorced
Speaker 1: are more likely to start making some outland just expenditures,
Speaker 1: possibly even lose their job, possibly foreclothes on a house,
Speaker 1: possibly start selling some assets, whatever, the case is, it
Speaker 1: had nothing to do with what you had going on.
Speaker 1: It had nothing to do with your finances. It had
Speaker 1: everything to do with statistics that didn't favor you for
Speaker 1: people that were going through a very similar situation to you.
Speaker 1: And that's how credit scores are actually made. And like
Speaker 1: he had said, there's no way of auditing this, there's
Speaker 1: no way of reaching out to TransUnion and being like, hey,
Speaker 1: I looked at the print out of what you said
Speaker 1: about my credit history, and I have a couple of
Speaker 1: discrepancies I wanted to iron out with you. No, that's
Speaker 1: how this works. That's how any of this works. You're
Speaker 1: at the behest of these companies.
Speaker 2: You can change certain things, but it's I mean, it
Speaker 2: takes so much.
Speaker 3: Like I said earlier, I've been trying for years to
Speaker 3: get stuff removed from mine. I know people that have
Speaker 3: removed a shit ton of stuff off of their credit scores.
Speaker 3: But there's sometimes you can be able to change things.
Speaker 3: Sometimes you can't. You can talk to them and you
Speaker 3: can call them, but they don't always help.
Speaker 2: I mean, was kind of a but you don't.
Speaker 3: I never knew that it was going off everyone else,
Speaker 3: So I mean, and then when you have stuff linked
Speaker 3: to your exes. That stuff I've always wondered if it's
Speaker 3: still somehow us connected.
Speaker 2: Because I noticed that he asked me.
Speaker 3: He's like, hey, my credit score has dropped a good
Speaker 3: bit has yours. I went and looked, mind dropped thirty
Speaker 3: points too, just like his dead, even though we have
Speaker 3: nothing connected. At the exact same time, it didn't make
Speaker 3: any sense to me.
Speaker 1: Oh, my first divorce, my credit score dropped significantly. My
Speaker 1: ex wife's dropped thirty points.
Speaker 2: That's so weird.
Speaker 1: Continuing on with that of how in the hell does
Speaker 1: that make sense? I was the one that was pretty
Speaker 1: much the breadwinner the entire time we were married. All
Speaker 1: of the loans ran my name, and I never defaulted
Speaker 1: on a single payment on anything. Ever, So just because
Speaker 1: I was a man, my credit score took a massive hit.
Speaker 1: There was no rhyme or reason behind that, except now
Speaker 1: we know statistically other people.
Speaker 2: That look like wowing outs after divorce, so people are like, yeah,
Speaker 2: fuck your credit score.
Speaker 1: Basically, they saw me as a high risk, and they
Speaker 1: didn't want me as a recently divorced man who had
Speaker 1: a stable job and all these things. They didn't want
Speaker 1: me going and start and get approved for some very
Speaker 1: high loans. I wasn't going to go buy a new truck.
Speaker 1: I wasn't about to go buy a house somewhere. I
Speaker 1: was no, No, they were trying to keep me in
Speaker 1: a certain left right lateral limit. Essentially.
Speaker 3: I'm curious to see how this ties in as we
Speaker 3: move forward with the fifteen minute cities, with the AI situation,
Speaker 3: with digital currency and all of these things, how this
Speaker 3: is going to continue moving on, and how this was
Speaker 3: just kind of a shot out of cannon, like, Hey,
Speaker 3: we did this experiment, We got this data that we
Speaker 3: like quote unquote, are using and they push forward and
Speaker 3: now have changed globally everyone's lives. I don't think the
Speaker 3: guy was malicious in doing it, but I think that
Speaker 3: it is turned into something once it got hold of
Speaker 3: you know, once Blackrock got a hold of it and
Speaker 3: everybody else. I think they were able to capitalize on
Speaker 3: the consumer as an aspect and be able to push.
Speaker 2: Forward gaining more money.
Speaker 3: I mean, the more BROOKEI you are, the better little
Speaker 3: worker soldier you're going to be because you're going to
Speaker 3: go to work, you're going to pay your bills, and
Speaker 3: you're gonna just got to try to survive. You're not
Speaker 3: going to really question what's going on around you because
Speaker 3: you don't have the time to do it. You're not
Speaker 3: going to question what they're putting in the food because
Speaker 3: you don't have time to go out and grow your
Speaker 3: own damn food. Like it all ties into everything collectively
Speaker 3: kind of crazy.
Speaker 1: One hundred percent agreed. And that's the thing no one
Speaker 1: taught us about credit scores. No one taught us about
Speaker 1: how actually a debt to income ratio, while that is important,
Speaker 1: is not the only factor. The actual factor is that
Speaker 1: it goes off of algorithms and statistics on people that
Speaker 1: look like you, that make similar money to you, from
Speaker 1: your area of the country, that have been going through
Speaker 1: some very similar life things that you might be going through.
Speaker 1: On the back end of that, all of that data
Speaker 1: is being sold to other companies so that they can
Speaker 1: start bombarding you with offers for things that you didn't
Speaker 1: even want. But it doesn't matter. The credit bureaus are
Speaker 1: making money handover fists on a you getting trying to
Speaker 1: get approved of these loans, and b the data that
Speaker 1: they're selling to these advertisement agencies on the back end,
Speaker 1: And on top of all of that, under this big
Speaker 1: umbrella at the very tippy tippy top is the fair
Speaker 1: and ISAAC Company aka Fiico, And so many people have
Speaker 1: no idea where that number comes from. This arbitrary number
Speaker 1: that decides what you can and can't do with your finances,
Speaker 1: that credit score, it actually has very little to do
Speaker 1: with you as an individual. I feel like not enough
Speaker 1: people know about that, so that good cult members is
Speaker 1: why I decided this episode needed to happen. And I'm
Speaker 1: hoping that everybody has learned a little something from this episode.
Speaker 1: Hopefully you gained a little knowledge. You might be a
Speaker 1: little pissed off a lot. Yeah, you might be a
Speaker 1: little pissed off. I know I am, But you know
Speaker 1: that's okay. That's okay. This knowledge exchange has happened and
Speaker 1: we can all move forward and grow through it together.
Speaker 1: And if you're gonna make some sort of a big expenditure,
Speaker 1: A have like half upfront if possible. And B if
Speaker 1: you want to try to fuck with your credit score,
Speaker 1: call one of these companies and they can do some
Speaker 1: things to adjust your credit in like two months. But
Speaker 1: understand it's not gonna They're not changing your debt, they're
Speaker 1: not changing your payment history. They're moving a little bit
Speaker 1: of things from point A to point B to make
Speaker 1: those statistics look better on those five points that they're
Speaker 1: actually pulling for your credit score.
Speaker 2: Yeah, that's crazy.
Speaker 3: I am actually going to check out that opt out
Speaker 3: of the prescreen dot com thing. I'm definitely gonna check
Speaker 3: that out and probably fill it out because I don't
Speaker 3: want my data being shared.
Speaker 2: I'm gonna be honest with you. I'm kind of over it.
Speaker 1: Yeah, same, same, But again, that only gets shared, well,
Speaker 1: at least that is only for opting out of your
Speaker 1: data being shared when you apply for a new loan.
Speaker 1: Whatever data they already have on you, they're sharing that.
Speaker 1: They're getting paid for that. But let's say you want
Speaker 1: to go for a new car or you want to
Speaker 1: do a trade in, and you need your credit score
Speaker 1: to get pulled. You have to sign up for these
Speaker 1: websites or call the toll free number prior to going
Speaker 1: to the car dealership so that they know that. But
Speaker 1: it's the car dealership has nothing to do with that.
Speaker 1: They need the numbers so that they can approve or
Speaker 1: deny your loan. It has nothing to do with the dealership,
Speaker 1: But it has nothing to do with the mortgage company.
Speaker 1: It has to do with the credit bureaus themselves.
Speaker 2: Okay, yeah, all right, well, hey, I learned a good
Speaker 2: bit about this.
Speaker 1: R Yeah, good cult members, we want to hear from you.
Speaker 1: What do you think about all these things? Do you
Speaker 1: think that the financial system is completely screwed? Do you
Speaker 1: think that we're idiots for not knowing these things? And
Speaker 1: apparently all adults know this. I have a hard time
Speaker 1: believing that, but fine, whatever, tell us what you think
Speaker 1: about a good cult members. But before I give that
Speaker 1: shameless plug, as they're talking about the financial system and
Speaker 1: all the things, I also want to make a mention.
Speaker 1: If you would like to get your start in the
Speaker 1: buying and selling and trading of gold and silver bullion,
Speaker 1: then go to the link in the description to cocsilver
Speaker 1: dot com and get your start today. When you fill
Speaker 1: out your information, Our homeboy Wayne Clark would be the
Speaker 1: one to reach out to you and get you square Toway.
Speaker 1: Listen as they're talking about these credit scores talking about
Speaker 1: loans that you can get approved or denied for. There's
Speaker 1: also this other thing where maybe you don't have money
Speaker 1: to put up you know, as a as upfront payment,
Speaker 1: but you may have something that you could use as collateral.
Speaker 1: Silver and gold bullion is excellent tangible collateral that you
Speaker 1: could use to get approved or denied for certain loans,
Speaker 1: regardless of a credit score. It's one of those things.
Speaker 1: Silver right now is over ninety five dollars an ounce.
Speaker 1: When we started this affiliate program, it was just over
Speaker 1: thirty dollars an ounce, while it's still affordable to get some.
Speaker 1: I know that might sound like a lot of money
Speaker 1: to people.
Speaker 3: I hear you.
Speaker 1: But even if you just start getting a coin here there,
Speaker 1: every couple of months, you might order a new coin,
Speaker 1: a new little piece, whatever the case. They have a
Speaker 1: wide wide range of different things that you can buy
Speaker 1: off of the coc Silver website. Go check it out
Speaker 1: today get your start in the buying and selling of
Speaker 1: the precious medals. But another way, good cult members, that
Speaker 1: you could support the show and let us know what
Speaker 1: you think about the financial system, FIICO, the credit bureaus,
Speaker 1: all of these things we want to hear from you
Speaker 1: would be too, Please hit the five stars at the
Speaker 1: shares of Licenscrit's comments, Legal Postter Reviewer shares your friends
Speaker 1: of Faily Sheriff and We're here's the deal. The more
Speaker 1: activity are Gouden sees across all the listening platforms, the
Speaker 1: more we get promoted and more potential listeners who could
Speaker 1: then become potential cult members like the rest of you.
Speaker 1: Final lydies and gentlemen, why are you ready? Go check
Speaker 1: out None Mystics Jonathan shown getting the same lover and
Speaker 1: inspect over there with the five star reviews and the
Speaker 1: positivity in the comments. Come check out The Cajun Night
Speaker 1: and come join each of us for our individual Patreon
Speaker 1: lives we host every Wednesday night at nine pm Central.
Speaker 1: Links to those are in the description as well.
Speaker 4: And we thank you.
Speaker 1: Everybody's already gone and done so. And with all of
Speaker 1: this being said, this was a beautiful and informative episode
Speaker 1: of the Cults of Conspiracy. Now I'm the Cajun Night
Speaker 1: and Rave and there's one very important, extremely vital piece
Speaker 1: of information needs to learn. Just as center as human
Speaker 1: as possible, No pass your blaser