After you finish reading this, try and give some innovative reasons that might be making the man smile. 
So, I was just went to myFICO.com to check my FICO score (made a huge balance transfer and now I am worried about my score…this is another story). On their main page, I see these three people smiling at me with their FICO scores halo-ing around their heads. Here is the image:
They got it right with the ladies on either side of the guy. The lady on your right has a wide smile due to her excellent credit score. The lady on your left has a not-so-wide smile because she realizes she will be paying more for her loans than the other lady. But the man? why is he smiling? Does he realize what it means to have a low credit score?
Here is a copy of a table right below the image on the website:
The man lies somewhere near the bottom of the table (marked by an arrow and a box). He probably doesn’t realize that, for $300,000 borrowed, he will be paying $457 per month more than the lady with the 790 credit score. That translates to a total of $164,520 over the term of his 30 year mortgage ! …and that is certainly noting to smile about. Small rises in APR probably mean nothing to some people unless they see how it affects their total cost. The lady with the score of 724 probably realizes that and hence the subtle smile :). She will paying $43 per month more than the other lady and it will cost her an additional $15,480 just because she doesn’t have a FICO score more than 759.
In my opinion, the image should look like this:
Now, you don’t want to look like that, do you? Make sure you understand what your credit score means to you and how much it will affect the cost of your debt/loan/mortgage. Fish around the internet a bit and find out all you can about credit scores and how to improve them. Almost all the major credit reporting agencies and some credit card websites have free tutorials about improving credit scores. Read them.
Btw, here are a couple of reasons why the man might be smiling anyways:
- He is not going to borrow anything anytime soon and doesn’t care about his credit score.
- Just because he is photographed between two chicks.
Anymore reasons you can think of?
Some resources (these are not ads so feel free to click on them):
Bankrate.com : Mortgage Payment Calculator
myFICO.com : Improving Your FICO Score
Experian.com : Improve Your Credit Score
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Hilarious. It reminds me of a TV commercial I saw recently in which a guy was ecstatic about his sub-650 credit score. “MY CREDIT SCORE IS 640 … NOW I KNOW! AND IT WAS SO EASY TO FIND OUT!” So easy to find out that you’re going to be emptying your wallet on your mortgage every month?
He’s smiling because with his right hand he’s stealing Miss 790’s wallet. He’ll get a mortgage using her identity and trash her credit instead of his own.
Can you exlpain how doing a balance transfer effects your credit score? I have been considering doing a BT, but I do not know how it will effect my credit score.
(If you have already explained this in a previouse post please ignore my question!)
trent, dimes:
Jon: I haven’t explained that earlier anywhere. There is a drop in score for certain. It’s because the score depends on the ratio of amount charged on credit cards/available credit limit. I don’t have a numerical feel about it right now, but I will find it out and let you know asap.
Perfect. Thanks for your help.
Jon
LOL @ what dimes said. I was thinking the same thing.
Great post Golbguru. I keep my utilization ratio on each card under 25% and my utilization of my total credit limit under 10%.
I pulled these numbers out of nowhere. I’ve read 35%, 33%, 30% before. So 25% is very conservative.
Again great post!
Man, this post is hilarious!
Keep it up. I have to add you to my blogroll now.
Ha! I just got my score from them the other night, and noticed that graphic, and though the same exact thing! I’m glad I’m not the only one!
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