The One Number You’re Forced to Care About… Your FICO Score


There’s no question about it… the whole credit industry is a real racket.  They’ve got us over a barrel or under their thumb, pick the clichĂ© you like, but there’s just no way out… we simply have to care about our FICO scores, whether we like it or not.  And if we don’t, it’s going to cost us a bundle.

I’ve always been frustrated by the whole FICO score thing… I just don’t think that a number assigned by a company after scoring a mysterious test is likely to be the end-all-be-all predictor of how you’ll pay your bills in the future.  In fact, I know it it’s not.

I only started paying attention to the whole FICO score thing a few years ago, when I discovered, along with the rest of the nation, that credit card companies were allowed to increase your interest rate to usurious levels, or cut your available credit limit in half… unilaterally, and at any time they desired.  And since then I’ve learned that a low FICO score doesn’t just stop you from getting loans, or cause you to pay higher interest rates, it also can mean paying higher insurance premiums, and it can even stop you from getting hired by some employers… it’s absolutely incredible how many ways that one number can either help or harm you.

Some are even recommending that you check your fiancé’s FICO before saying “I do.”  And if anyone actually does that, please let me know how it goes… I’m dying to hear all about it.

In 2008, I know I wasn’t alone when I started receiving letters from credit card accounts that I’d carried for many years, informing me that my balance had been significantly reduced, like from $7,500 to $5,000.  Why?  No reason was given, except that Citibank decided to do it.  And later, when I was forced to make a few payments later than I would have liked, I found out the hard way that credit card interest rates could go to 19.9% or even 29.9% overnight… and they didn’t even have to drop a postcard in the mail to let you know.

Here’s how I honestly think about this subject…

I’m 52 years old.  If I miss a car payment or credit card payment next month, what does that say about my ability or willingness to pay my bills going forward?  The answer is: Absolutely nothing.

At best, all it says is that something has come up.  Maybe it’s because I’m out of town, haven’t gotten my mail and nothing’s wrong financially.  Or, maybe I just got a surprise medical bill for $2500, or I committed $4000 to remodeling a bathroom, or maybe my daughter’s expenses were higher than usual for any number of reasons.

As I was writing this article, I tried to count all the new cars I’ve bought and paid off in my lifetime.  I couldn’t do it with certainty… 15?  I really don’t know.  So, the fact that I was 30 days late on a car payment twice last year… should that make a 80 point difference in my precious FICO score?  It’s stupid… but we both know the answer is that it does.

Besides, half the time when I see a late car payment on my credit report, I don’t even know if it means that I was actually late, or if GMAC screwed up and didn’t post my payment when it arrived. I didn’t used to think that way, but after what I’ve seen GMAC do to homeowners over the last five years, I’d say the odds that they caused the late payment are pretty darn good.

Does any of that mean that at 52 years old, my credit score should go down appreciably because I missed a car payment one month?  Does it mean that I’ve changed in some meaningful way?  FICO’s statistical formula says it does, but in reality… of course it doesn’t…  it’s statistically ridiculous.

And get this… according to FICO… even one 30-day late payment can cause your score to drop as much as 110 points, and the better your score is, the more one mistake costs you.  But a foreclosure can take your score down up to 160 points!  That’s 110 points for a 30-day late car payment, and 160 points for a foreclosure?  So, the moral of that story is… you should make your car payment on time and screw your mortgage?


Your “revolving utilization” percentage…

A few years ago I started learning that some of the things that negatively impact your credit score, you wouldn’t even be likely to know about.  For example, I learned that if you charge more than 35 percent of your credit limit on a credit card, and that balance is there on the one day a month when your FICO score is calculated, your score will take a turn for the worse.

“Revolving utilization” is credit-score-speak for the amount of your revolving credit card limits that you use.  If you’re credit limit is $10,000 and your balance is $5,000, then you are said to be 50% “utilized,” because you’ve used half your credit limit.

Your revolving utilization percentage is almost as important to your credit score as making payments on time… it’s responsible for roughly 30% of your FICO score.  As the percentage increases, your FICO score drops, even if all your payments are made on time.

So, if your balance is more than $3500, and your limit is $10,000… your score drops.  It doesn’t matter if you pay the $3500 at the end of the month or make payments on time; if the balance is there on the wrong day, your score suffers.  FICO says that one maxed-out card can cost you between 10 to 45 points, depending on your original score.

It makes no sense whatsoever, in my view.  Even if I charged $10,000 on that card, as long as I make the payments on time every month, shouldn’t my score go up?   Why should it go down?  At the very least shouldn’t it stay the same until I actually do something wrong?


They should never close…

Considering that your score will go down if your utilization percentage goes up, it was both surprising and ironic to find out that if you want your FICO score to go up, you shouldn’t close credit card accounts.  Closing credit cards won’t make your score go up and may very well make it go down.  (And yes, you read that correctly.)

Why?  Two reasons:

  1. The length of your credit history makes up 15 percent of your FICO score.
  2. Closed accounts will fall off of your credit report sooner than open ones.

So, when you close an account you lose the advantage of a longer credit history and it happens sooner than had you just left the account open and not used it.

Don’t charge too high a percentage of your credit limit, but on the other hand, don’t close credit card accounts either?  Both make your score drop?  But, at the same time, charging and making payments on time doesn’t help your score, if the amount you charged is too high a percentage of your available credit?  It’s making me dizzy trying to explain it.

Okay, that’s enough for me… check please.

About 18 months ago, I started looking for a company that helped people improve their FICO scores.  Not only was I interested in finding out how such services worked for my own personal reasons, but I also figured that if I could find the right company, I might also be able to cut a deal to offer the company’s services on Mandelman Matters and make a few bucks on the side.

I started out just like everyone would, by looking online… searching for credit repair, credit counseling, credit education…  read about the scams and the laws that been passed to regulate the industry… and started contacting different companies that caught my eye to ask them what they offered specifically and how much their services cost.

I read all about CROA, the Credit Repair Organizations Act, that had regulated for profit credit repair companies beginning in 1996.  Technically, it was “Title IV of the Consumer Credit Protection Act,” but Section 401 says that it can be referred to as “Credit Repair Organizations Act, so that’s what it’s commonly called. CROA makes some basic things mandatory, requires certain disclosures and contract requirements, and provides for penalties for non-compliance.

As you’d expect, CROA was passed to ensure that consumers are provided with the information they need to make informed decisions, and protect the public from unfair or deceptive advertising and business practices.  It says that companies can only be paid after services are rendered, which can be monthly; nonprofits, I learned, were largely exempt.

I also learned that all the experts recommend that you review your credit reports at all three bureaus at least once a year to make sure there are no inaccuracies… I ordered mine, but to be entirely candid, I couldn’t really figure out how to read it.  It was about like trying to read a hospital bill… if you’ve ever tried to read one of those… it might as well have been Egyptian hieroglyphics.

(By the way, you can order a free copy of your credit reports, at this federally mandated website: or call 877-322-8228.)

I quickly found that credit repair services came in a variety of flavors.  Some were just basically letter-writing services, you paid them hundreds of dollars and they simply questioned everything on your credit report.

When you question something on your credit report, I learned, the creditor has a certain number of days to prove to the credit bureau that you actually do owe the debt… and when one can’t or doesn’t within time allowed, whatever was on your credit report related to that company had to be removed.  Of course, if the creditor gets its act together the following month and presents proof of your indebtedness to the credit bureau, then whatever had come off would come right back on.

The value in such a service was that they could get your score up fast, and even though it would likely come back down just as fast in most instances, while it was up, you could probably go buy a car or even apply for home loan.  And while I understood why someone would want to do something like that, it wasn’t what I was looking for so my search continued.


So, I started reading everything I could about credit repair.  And as I read, I decided to make a list of what I wanted out of my perfect credit restoration company…

  1. Clean Up of Credit Report – Of course, this would be important, but it would also only be the beginning.  Getting things off of your credit report that shouldn’t be there was just a first step in my mind.
  2. No Hit-and-Run Services – I wasn’t looking for a service to sell me something and then be gone.  I wanted something with more support… like a coach that would be around all year long, so I’d have someone to turn to when I had questions.
  3. The Right Attitude – Satisfaction Guaranteed – I wanted a company that offered a satisfaction guarantee and in general, saw things the same way I did.  I know all company’s are in business to make a profit, but I wanted one that also truly enjoyed helping people get their FICO scores up and their lives turned around.
  4. Focused on Education – While I wanted to hire a professional to handle things for me, I also wanted to learn more about how the whole FICO thing works.  And I don’t care what anyone says about how I can “do it myself,” the subject of credit is complicated and I wanted an expert to help me get smarter about it.
  5. Tools to help reduce debt overall – I wanted a comprehensive solution that went beyond just getting my FICO score up… I wanted to know with certainty what I needed to do, and not do, to keep it up.  After this economic meltdown, I was ready to make some permanent changes.
  6. Reasonably Priced… Inexpensive Even – I decided, that the services shouldn’t cost more than $500… or if it were a monthly fee, then it shouldn’t cost more than $100 a month.  Why?  I don’t know, it just felt like the right numbers to me.  I found some services that cost more but I wasn’t convinced that they would provide more.
  7. A+ Rated and Available Nationwide – My perfect credit restoration company had to be available in all 50 states, be CROA compliant, have an A+ or A Rating with the BBB… and in business for at least 10 Years.
  8. An Exceptional Business Opportunity – And if possible, I wanted to find a company I could endorse and also work with in order to make a few bucks.  The use of credit repair services is up by 200% this year according to some reports, and that doesn’t surprise me. I think it’s pretty clear that the next five years will see the largest number of Americans using credit repair in history and I don’t think I have to tell you why that would be the case, right?

So, 18 Months Later…

This past July, after almost 18 months of searching for a company that fit into the eight criteria listed above, and about to give up… I found a company that I liked: Financial Education Services/United Credit Repair, which has been headquartered in Michigan for over a decade.

I spent several hours talking with the CEO the first time we spoke, and I liked what he had to say right from the start.  And over the last few months, I spent time getting to know the company… talking with its various managers, actual customers and its agents… and finding out what others had to say about them.

First of all, the company has been in business for 13 years, although the founders have over 25 years each in the industry… the credit restoration company has an A+ rating with the BBB nationwide… they are VERY focused on education… they’ve had tens of thousands of clients… and they DO offer a satisfaction guarantee.

They’re a brick and mortar business with highly trained credit experts that staff their customer service lines, and they are vigilant about providing ongoing training so that those answering their phones are always current.  And they’re not expensive… they’re even less than I thought my perfect company should be.

They’re not a company that sells you something and then disappears… their clients sign up for a year… FIVE credit cycles… and over that year the company’s experts work a credit coaches to get a clients’ FICO scores up in numerous ways… it’s not just about challenging what shouldn’t be on someone’s credit report… there’s just a whole lot more to it than that.  And their clients, through a web portal, have 24/7 access to their personal file so they can easily keep track of their progress and everything that’s being done on their behalf.

They also offer some very valuable tools and educational resources and videos that make understanding credit and becoming debt free very straight forward… you can check them out online using a link below and I’m sure you’ll be impressed.

I spoke with a dozen or so of the company’s customers… one is a mortgage banker in Arizona who told me she absolutely loves what they do… she refers her own customers to them all the time… and she told me that no one else out there does things the way Financial Education Services does.

(You can listen to my conversation with her and other customers and agents of Financial Education Services, by clicking PLAY on the podcast link below.  You should really do it… if you care about your FICO score, or are in a business serving consumers… it’s really worth hearing what they have to say.)

The company even provides special educational programs, through it’s non-profit: Youth Financial Literacy Foundation, on credit, debt and other financial matters in schools, for children and teens, ages 8-18… the sort of thing I think we all could have used while growing up.


Results that speak for themselves…

One customer told me that in six months, his credit score went up by 200 points!  One said his FICO score went from approximately 640 to 800 by year’s end.  Another told me how he had filed bankruptcy, but never went though with it, and the company was able to get that filing removed from his credit report, instead of it sitting on there for 10 years.

I also spoke to several people who first became customers in need of credit restoration services, but after seeing how well it worked, became agents of the company.  Today, they make their livings offering the company’s services… and we’re talking about pretty darn good livings at that.

One of the agents you’ll hear on the podcast below will tell you how he made $8,000 the first year he became a part-time agent… then he made $45,000 the following year, while he was still part-time.  Then last year he went full-time and earned $90,000… and, ready for this… he says this year his income will double again, or darn close.  And that’s real money as far as just about anyone is concerned, I would think… but it’s also nowhere near the highest paid agent at this company.

Skyrocketing demand…

What does that tell you about the growing demand for credit restoration services in this country?

It should tell you that what I’ve already told you is right… that demand is growing and growing fast.  And after what we’ve been through, and are still going through today… it really shouldn’t be much of a surprise… I can’t think of too many people I know that don’t need to get their FICO score back up to where it was before the downturn in our economy.

Consider this… last year Financial Education Services grew by 100 percent… in other words, after being in business for more than a decade, they doubled in size.  Now, many companies double in size after being in business for one or two years… maybe even three.  But to double in size after a decade… well, that’s just pretty much unheard of, in fact, I can’t think of another like it… maybe Apple Computer, I’m really not sure.

I don’t want to take anything away from this company’s management here, because there’s no question, they’ve done an outstanding job, but to double in size after a decade requires more than whatever the company could do… that kind of growth means that demand for what the company offers is growing in a big way.

Also increasing are stories about credit reporting and FICO scores in the news.

Did you hear about Julie Miller of Marion City, Oregon?  She was awarded an 18 Million dollar judgment against her creditor and Equifax for failing to properly handle her account/disputes and causing her irreparable damage.  And, Steve Kroft of “60 Minutes” during a show last February stated that 80% of credit reports contain errors that can negatively affect a consumer’s credit rating.


You can do it yourself…

It seems like everyone wants people to know that they can attempt to clean up their credit reports themselves… the idea being that there’s no need to hire a company to help.  First of all, I’m sure that’s it’s true that I’m allowed to attempt it on my own… I certainly didn’t think there would be a law prohibiting me from trying to increase my own FICO score.  But, both my wife and I have tried on several occasions to get things removed from our credit reports without help… my wife made it for 60 days before throwing in the towel and I didn’t even make it that long.

Maybe if the cost to hire an expert to help was thousands of dollars, I’d have given it more effort, but when there’s an expert available for $500 or less… or I can hire an expert for $39/month… well, I’m just not going to bother going through the learning curve so I can develop the expertise myself, thank you very much.  But, if you were willing and able to do it on your own… more power to you.  Like I said above, I couldn’t even read the darn thing.  In fact, I still haven’t heard back from Experian, and I only asked a question about hospital bills about three months ago.

Financial Education Services does the work and they do it very well by all accounts.  Their Credit Coaches work with each customer throughout the entire year, if needed, they provide customers with documented proof of their progress throughout that year… and they have a satisfaction guarantee that shows me that they stand behind their work.

I’ve come to believe they are the best in class as far as credit restoration goes and I’m confident enough to recommend them to Mandelman Matters readers for two reasons:

1. I know many, if not most of those who read Mandelman Matters have seen their FICO scores drop for all sorts of reasons over the last 4-5 years.  If that’s you, then I’d urge you to call the phone number below.  It’s staffed with experts in everything this company offers and those answering the calls are dedicated to Mandelman Matters readers.

Listen to the company’s customers on the podcast below and you’ll hear why I’ve come to hold this company in such high regard. Over more than a decade they’ve helped thousands of consumers increase their FICO scores… and they do it inexpensively and with a money-back guarantee if you’re not satisfied.

2. I also know that many of my readers are in businesses that serve credit conscious consumers for any number of reasons… Realtors, mortgage brokers, those working for law firms and other professionals who are dedicated to helping homeowners save homes from foreclosure… all have clients who need their FICO scores to be as high as possible.

If that describes you, then you should call Financial Educational Services to talk about the business opportunity… so that you can offer high quality and comprehensive credit restoration services to your clients, and be ready to capitalize on the skyrocketing demand that’s already got to be making the industry one of the fastest growing in the country.

The bottom-line is that if you’re already in the business of helping consumers, Financial Education Services offers something almost all of your customers need… and more and more will need each year going forward.  I’ve spoken with individual agents of the company who are earning well into six figures and who recently have seen their incomes literally double year over year.

So, as I said, I called the company’s customers and agents to see what they had to say, and I spoke with the company’s president, Mike Toloff.  And since I knew others would want to hear what they all had to say first hand, I incorporated those calls into the Mandelman Matters Podcast that you’ll hear when you click PLAY below.



To check out what Financial Education Services offers consumers,

you can visit the company online by clicking on the link below:

Financial Education Services Website

To talk to a Financial Education Services credit expert

dedicated to helping Mandelman Matters readers call:




Mandelman out.

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