Is Common Sense Returning to Consumer Lending?

Yesterday I read a post by The Finance Buff which the writer entitled “The Credit Crunch Finally Hit Me.”  After reading the post, Mr. ToughMoneyLove had to leave a comment that disagreed with the title and premise of the article. Read more

Credit Score Industry Infighting: Greed Exposed

Full disclosure:  I detest the credit score industry.

If you are like most U.S. consumers, you have been brought up (or forced to participate) in a consumer credit system in which we are taught to worship at the altar of the almighty credit score.  This causes many of us to focus on the wrong parts of our financial life while overlooking little things like true wealth building.

The FICO oligopoly has gotten into the heads of millions of Americans. Part of this is out of necessity because the credit score slime has slowly but surely oozed out of where it began.  The score has become more than just a measure of your credit-worthiness.  All kinds of businesses use it as metric of your worthiness as a person in general.  Insurance companies, landlords, prospective employers, you name it.  It’s disturbing if you really think about it.  (Please take time to really think about it.)

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The Tough Money Love “Can I Afford it?” Quiz

Karen Datko over at the Smart Spending blog tipped us off to a nice summary published by the Strump of ten ways to tell if you can afford it.   The Strump’s list is excellent as far as it goes but Mr. ToughMoneyLove is now inspired to administer the second part of the affordability quiz.

So here are ten Tough Money Love ways to know when you can’t afford to buy something: Read more

Shouldn’t We Burn Credit Cards in Protest?

In the sixties and seventies, some angry young men protested the Vietnam War by burning their draft cards.

Also in the sixties and seventies, some angry women protested their unliberated status by burning their bras.  Read more

The Two Personal Finance Lessons We Should Learn from the Demise of U.S. Investment Banks

Lehman Brothers Faces the Hard Truth

Lehman Brothers has been forced to face the hard truth.  It has filed bankruptcy and will be sold off for a small fraction of its book value of just six months ago.  Bear Stearns collapsed earlier this year.  Merrill Lynch has sold itself to Bank of America.  Other investment banks are on the brink but may survive.  Fannie Mae and Freddie Mac, although not investment banks per se, have been taken over for similar reasons.  Read more

Responsible Credit Score Strategies for Young Adults

You Can Improve Your Credit Score and Build Wealth

Yes – you read that title correctly.   Mr. ToughMoneyLove is going to discuss credit score strategies.  Why?  As I continue my tough love campaign against credit score obsession, I have to acknowledge that it is unlikely that readers will choose my path of being completely oblivious to my credit score. Read more

My Tough Love Campaign Against Credit Score Obsession (Part 2)

A Little History about the Credit Score

Welcome to Part 2 of my series on credit score obsession and addiction.  In Part 1 of this series, I told the story of my son being denied the right to open a savings account at an online bank because he had no credit history.  This experience reinforced my belief that the credit industry (with our unwitting cooperation) has unfairly elevated the status of credit scores in our economy.  This has led to pervasive abuse of credit scores by not just creditors but by financial service providers of all kinds, by landlords, and even by prospective employers.  Unfortunately, too many consumers have allowed this trend to push them into engaging in money behaviors and adopting bad money habits for the sole purpose of maximizing their credit score. Read more