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