Common belief: FICO score reflects financial success.
Reality: FICO score does not change with income or assets unless debt is incurred.
Personal experience: The speaker has no FICO score, has never been in debt, and gets by just fine without one.
Living Without Debt
Speaker emphasizes personal freedom from debt.
Able to rent homes, get utilities, and travel without a credit card.
Challenges exist initially when renting or setting up services, but these can be overcome with responsible behavior.
Example: Paid a deposit for electricity which was refunded after timely payments.
Credit Reports
Contains personal information, borrowing history, and payment behavior (last 7 years).
Important to pull credit reports at least once a year to check for identity theft.
Even if not borrowing money, checking credit report helps catch errors or theft.
Identity Theft Considerations
Growing Issue
Identity theft is prevalent, with increased incidents reported annually.
Speaker shares experiences and steps to take if identity theft occurs.
Steps to Take if Identity is Stolen
Place a Fraud Victim Alert
Free service; can report online.
File a Police Report
Essential for making the fraud alert permanent (otherwise valid for only 90 days).
Understand Liability
Victims of identity theft are not liable for fraudulent charges made by criminals.
Banks and creditors bear the loss, not the identity theft victim.
Contact Fraud Victim Division of Creditors
Prepare for potential mistreatment; persistent follow-up is key.
Document everything.
Correcting Credit Report Inaccuracies
Under the Fair Credit Reporting Act, inaccurate items must be corrected within 30 days of notification.
Notify the credit bureau with a letter stating the inaccuracy.
If necessary, go to the source of the misinformation if the creditor disputes the inaccuracy.
Recommendations for Managing Credit Reports
Proactive Measures
Send all correspondence via certified mail for proof of receipt.
Follow up persistently if inaccuracies or fraud issues arise.
Complaint Process
Report any unresolved issues to the Federal Trade Commission (FTC).
Conclusion
The speaker advocates for financial independence from traditional credit systems and encourages awareness regarding identity theft and credit management.