Is there a correlation between a high FICO score and a high personal wealth?
by Author on Friday, August 20th, 2010 | 3 Comments
Do rich people have high FICO scores?
Are people with high FICO scores necessarily rich?
Are there poor people with great credit?
What I'm getting at is If a person works toward the goal of a high FICO score, will that get him rich?
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Dave Ramsy said his FICO score is zero and he is rich.
There is actually no correlation at all. The FICO scoring system actually looks down on multiple mortgages and debt. most "wealthy" people will still have a mortgage on their homes (if you can invest and earn 10% per year on you money,what does 7% on a mortgage matter, you’re still picking up 3 points).
Just to clarify…there are wealthy people with low scores and poor people with high scores. Creditors are going to look into more than just the score, they are going to look at ability to repay the debt, income, etc.
Hi,
The fact that someone has or uses credit is not in itself a bad thing and people do get into credit difficulties for many different reasons.
But to become wealthy and have a high net worth financially is a rather how you use your credit rather than whether you use it.
Having a credit card makes it very easy to rent a hotel room or a car.
And hardly anyone pays for a house with a lump sum of cash,
they take out a mortgage which is a form of credit.
But when you spend all you earn and buy things that depreciate and takes years to pay off then you run the risk of having poor credit and no savings.
Without some extra cash, how will you invest?
And without some type of investment and money working for you how will you get ahead of the pay check to pay check?
No one can just earn a pay check to get wealthy!
Yvonne