Personal Finance Videos

The speaker provides an overview of the unemployment rate and discusses how the government purposely manipulates the unemployment rate incorrectly to prevent panic and fear to hit the markets.  The Bureau of Labor Statistics report unemployment in six different ways.  It excludes certain categories of workers which make up a large part of the unemployed population; thereby, lowering the unemployment rate to artificially low levels. 

The speaker discusses how your credit score can help you get through the credit crunch.  He mentions that lenders will look at three major factors before extending credit to borrowers:  collateral that is put down, capacity to repay debt, and your FICO score. 

He demystifies some common myths on credit scoring.  For example, 70% of people believed that credit score was impacted by income level.  40% of people believe that age affects your credit score.

The FICO score is a rating scale between 300 and 850 and is a major tool used by lenders to assess the risk of the borrower.  FICO scores are derived from data within the credit reports from the three major credit reporting bureaus.  He suggests that one of the major components of your FICO score is consistent on time bill payments.

The speaker discusses the importance of knowing what your FICO score is.  He mentions that many Americans may be using their credit cards more than they would like due to the financial crisis that this country is in.  He suggests that it is important to understand the ramifications that this activity is having on their credit report.  Some employers will actually check your FICO score before they hire you so you need to be careful how you extend your credit.

He makes a distinction between credit score and FICO score and suggests that they are not the same.  A FICO score between 760 and 850 is optimal.