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