I’ve seen several books by Suze Orman out there, but have never read one. I’ve read the dust jacket on a couple of them, but I’ve never really been that impressed with what it says. I’ve planned on borrowing one from the library one of these days to see what it is all about. I don’t want to judge her book by the cover, pun intended. A couple of weeks back I stumbled upon her self-titled CNBC TV show and have watched a few episodes here and there. While she has some good information, overall she is sending a big mixed message.
Overall her message is great, reduce debt, don’t spend more than you make, don’t spend lots of money on expensive stuff you don’t need, and keep an emergency fund in place. Those are all excellent tips that everybody should be following.
What confuses me though is her worship of the FICO score. On one hand she talks about reducing and eliminating your debt, yet on the other hand she talks about what to do to keep your FICO score from dropping. I was watching an episode last night where she was warning people about paying only their minimum payments, and how that could cause credit limits to drop, thereby reducing the FICO score. This would then cause other creditors to drop their limits and reduce the score even more, and it would continue rolling down hill like a big evil snowball. According to her this is going to cause an atomic bomb to be dropped on the economy when credit cards start to drop their customers because of their FICO scores, the nobody will be able to buy anything. Has she not heard of using cash? It only means people will be forced to stop buying things they can’t afford.
Did you know the FICO score is entirely based on a person’s debt? I’m thinking she doesn’t know this the way she acts. She encourages people to get out of debt yet seems very concerned about FICO scores. A FICO score is “an I love debt score” to quote Dave Ramsey. Why fight so hard to maintain a good debt score when your goal is to get out of debt and stay out of debt? Outside of debt the only thing a good credit score will help with is employment and insurance. I can promise the additional insurance premiums I’ll have to pay when I’m debt free (and therefore a credit score of zero) will be less than the interest fees I’m paying now. Seems like an easy trade to me. As far as employment goes, if an employer is going to make a hiring decision on me based purely on my FICO score, without looking at the reason behind the score, then I probably don’t want to be working for them anyway.
I’m going to continue to watch The Suze Orman Show occasionally, but I’ll be taking the information with a grain of salt. I’m getting the feeling that she is trying to appeal to a larger audience by being more entertaining, but unfortunately that seems to be at the expense of giving sound financial advice.
06 January 2009, 12:11
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13 January 2009, 5:00
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