A better alternative to credit scores!

Saving & investing, frugality & simple living. They're all part of the wealth equation.
Here's the place to discuss getting (and keeping!) your money.

Moderator: lvergon

measuredme
Posts: 2
Joined: Tue Aug 28, 2012 12:28 pm
Contact:

A better alternative to credit scores!

Postby measuredme » Tue Aug 28, 2012 12:38 pm

Hi! I am new to this forum, but have been reading Get Rich Slowly and similar blogs for a long time. I am also a member of Quantified Self community: we track different aspects of our lives and use numbers and analytics to "optimize our life portfolio", so to speak. Recently, I wrote a post about a new approach to measuring personal financial solvency and fitness: http://www.measuredme.com/2012/08/finan ... cores.html

In summary (for those of you who are too lazy to follow the link), I suggest a system that would use Mint.com or other data to compute a "financial fitness score". This score, unlike net worth measures both your financial solvency and savviness, and unlike credit scores, discourages inconspicuous consumption and lifestyle inflation.

I would love to hear feedback on this idea from folks in this community, either here in this thread or on Twitter @measuredme

Thank you!

K.

------------------------------------------------
Can you express your everyday life in numbers? Can you improve your life by turning it into a game? Follow my personal self-quantification and self-gamification experiment to find out how to improve your financial solvency, health, fitness, career and other aspects of your life, using personal analytics!

Northern light
Posts: 192
Joined: Sat Jun 16, 2012 2:11 am
Contact:

Re: A better alternative to credit scores!

Postby Northern light » Tue Aug 28, 2012 10:04 pm

FICO does not take any consideration to net worth, wich would be very valuble information for me if I where to lend someone money.

Civil status, education, employer, salary, assets, debt, number of children to support... All info I would recuire that FICO don´t. I would like to know that you pay your bills (not only credit) as well. Given everything else looks fine I would highly value someone with no debt over someone with multiple revolving credits in use and a hefty mortgage. FICO frown upon a debt free lifestyle wich is madness.

measuredme
Posts: 2
Joined: Tue Aug 28, 2012 12:28 pm
Contact:

Re: A better alternative to credit scores!

Postby measuredme » Sun Sep 09, 2012 3:44 pm

Northern light,

I absolutely agree with you! FICO frowns upon the debt free lifestyle and encourages lifestyle inflation (living beyond your means). I just used a credit score simulator, and a new (3rd!) credit card + higher credit limits on my other 2 cards would give me a 50-points boost. And, of course, purchasing a real estate, which would be an insane move in Manhattan at this point.

User avatar
marco_salinas
Posts: 4
Joined: Wed Aug 15, 2012 1:19 am
Location: Austin, TX
Contact:

Re: A better alternative to credit scores!

Postby marco_salinas » Wed Sep 12, 2012 9:31 pm

In my research, if an individuals who lack traditional FICO scores often turn to high interest payday loans due to their inability to obtain bank loans. High-interest, short-term loans present a danger to the consumer since the inability to repay the debt can lead to lasting credit damage. Alternative credit scores prevent this scenario by giving banks the information they need to lend to those without a traditional credit history. The banks also benefit by attracting new, responsible, customers. Hope this would be helpful.

[Spam link removed]


Return to “Personal Finance”

Who is online

Users browsing this forum: No registered users