Remember when Jay said:

You wanna know what’s more important than throwin’ away money at a strip club? Credit. You ever wonder why Jewish people own all the property in America? This how they did it.

Well I think that conversation needs recycling, so I’m doing it now. Ironically a buddy of mine and I were recently talking about credit; something I’m all for, cause I’ve learned to focus on doing the same.

Redirecting…

No Description

It’s not that I’m planning to buy all the property in America, but I recently came across a YouTube video talking about paying off mortgages in less time. A lightbulb went off at that point. I had searched for something I could use to help pay down my own debts, and within the video it described something I thought could be useful if carefully applied.

And as I watched and took in the information I couldn’t help but think of that Jay-Z song I mentioned, because in the video the woman basically describes how to use credit more effectively. Oddly enough, I had already thought about ways I could better use my credit, and assuming the strategy described is workable, then things would be better financially down the line.

This topic of financial freedom (and literacy) is lacking in many homes, but with all the available options, tips and information out here now, I feel it’s never been a better time for us to get our affairs in order.

Credit Score

Just recently I saw my credit union now offers members a chance to check and watch their score. At first glance I’m thinking this is perfect because I’m already paying a monthly subscription for this service. It’s no complaints from it, but eliminating one more bill from my expenses is nothing to shy from. But then I saw the service from my bank was provided by a third-party; basically meaning my credit union partnered with this company to offer the service. Sounds good. But me being a privacy advocate in some regards I read through the company’s TOS and privacy policy.

I can’t pretend there was a smoking gun, like them being able to sell my personal information (something like oil in today’s world), but it did say they needed to know it to offer the services and only work with other parties (who will have this access) for the same reasons. Sounds good, again. But, it got to thinking “who are these other parties with access to my data?” Sure, they’re not selling it to the highest bidder (at least I hope) but they WILL know my information. It’s not just me, the credit agencies, the alphabet boys but other parties I have no clue of unless I do further research. I suppose I’ve already given this information out many times over, but still.

One Final Thought

After thinking about that last section, I decided to search on the idea of banks offering credit scores in general. I stumbled on a few articles, like this one by Investopedia, but this one from USA Today is one I’m going to reference here on out. Inside the article it talks about FICO expanding the range of determining credit scores by using bank history (i.e. checking, savings, etc).

New FICO system could lift credit scores by including checking and savings history

CLOSE You may soon earn a higher credit score if you balance your checkbook responsibly. FICO, the developer of the most widely used credit score, is rolling out a new score next year that considers how you manage your checking, savings and money market accounts in addition to how you pay back your credit cards and loans.

I can see a benefit to the consumer if he or she  maintains a decent banking account. But I’m left with a few concerns.

One, banks make their money by deposits. The more consumers deposit money in the bank, the more money a bank can lend out and attach interest on for a profit. It’s a genius system.

But remember the video I described at the start? The woman talks about how that money in our checking and savings offer little benefit to us by sitting; compared to more wealthy people who have their money elsewhere. But there’s nothing wrong with a checking or savings account. I’ve had one since I can remember, and with familiar faces like 21 Savage advocating members of our community being more literate financially, I’m not knocking it.

Mic Dispatch

How do you stop the cycle of poverty? Rapper 21 Savage thinks he has the solution. Mic correspondent Chantel Simpson talks to the Atlanta rapper about his 21 Savage Bank Account Campaign.

However, once realizing how the banks work we know leaving all our money in a banking account can cost us (think of inflation) over time. But again, it’s nothing wrong with that because it’s not like we can’t both work a banking account and have funds working elsewhere.

Two, I’m more so thinking about how this opens up a privacy issue where your banking history will be accessable by people beside the account holder and financial institution. Because in the event a company faces legal trouble or police get involved, is that data of yours still protected? Or what about a hacker with an advanced system good enough to hack one or more of these companies with access to their data?

All in all, seeing my credit union now offering credit score services for free made me think about these things. The mortgage video, my credit and personal info, and the USA Today article because it looked like a trend in my opinion that banks are adopting and mostly because the new FICO model was making bank history a factor to help improve scores.

It’s not to say no one will benefit from this, because I imagine some will, but I also imagine those who will have less benefits and arguably be harmed more if they only keep up a bank account. In the event you mismanage one, it’ll hurt your score where at one time it didn’t, so in a way this new model incentivizes a banking account but discourages one in the same breath if it’s not in proper standing. I don’t think people would have much of a choice with everything being electronic anyway.

Free Flow

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