Transcription
Hey, what's going on out there? I would like to welcome every single one of you to Water Your Soil.
So before I get into this video, I would like to say if you're new around here, I have two rules over at this channel. The first rule is for you to always use your own discretion when it comes to credit cards and credit scores. The second rule is for you to verify everything that you learn, whether it's here on this channel, another channel, or anywhere. That should be a rule of life.
Getting into the video, this one is going to come as a warning. It's an article that was released this past week, and this article is featured on CNBC. It's a major warning for all Americans, especially if you're concerned with credit scores, and I'm going to tell you why.
What I normally do when I have these news videos is I'll read through the article and I'll put the link in the description box so you all can read it as well. I like to practice transparency that way everyone will know what I'm talking about, and they could see it and read it for themselves.
But before I even get into the article and read off the article, I want to say something. Make sure that if you're subscribed to this channel, you go up just under the video and you click on the bell and select all. There has been a widespread issue over here on this platform, and people are getting unsubscribed from channels because they're being considered as inactive accounts. So make sure you go and you click on the bell and you select all. That way you'll get all notifications. This isn't just for this channel, but whatever channels you're subscribed to and you like, make sure you do this.
Also, make sure you hit the like button. That way the algorithm knows that you do support this video and this channel and that you are an active subscriber.
But I'm not going to waste any more time. I'm going to get right into the article.
All right, so let's go. It says, "Bad news: The new FICO credit score changes could impact the credit cards you qualify for. The FICO 10 scoring model is slated for a summer release and could cause your credit score to drop 20 points as the model looks at past debt and balances."
Now, this article was released on January 28th, 2025, and it was done by Alexandria White over at CNBC. Now, if you've been a subscriber to this channel for about the last 6 months to a year, you'll know I did multiple videos on the FICO 10 and FICO 10T, letting you all know, issuing a warning that they're both coming down the pipeline. They're both coming. They're going to be looking at past debt and balances, and that's going to impact a lot of people.
I guess some people have been thinking that I was joking when I was telling people that they need to start creating a habit of paying down their credit card balances and creating a habit of paying off whatever they're spending for. I mean that because I knew years ago that FICO 10 and FICO 10T were coming. Now it's official that they're coming.
There have been multiple channels, not just my channel, warning people about FICO 10 and FICO 10T and them coming down the pipeline. I've been continuing to tell people, "Hey, get in the habit of creating good habits with your credit score."
But we're going to get further into the article, and it's going to reveal some things, including how it can impact you because a 20-point drop could be a lot for some people.
Let's say you have a 700 credit score. That 20-point drop takes you down to a 680. Let's say you have a 620. That 20-point drop takes you down to a 600.
So Americans all across the board, it doesn't matter what your income level is, all across the board, you need to be concerned with this. Whether you're low-income or you're wealthy, either way, you need to be concerned with this.
One thing that I would like to address before I get into the article is people tend to have this mentality where they'll say, "Oh, credit scores are for people who don't have money because wealthy people, they don't need credit scores, nor do they use them."
I would like you all to personally get around some wealthy people, and you will see that more often than not, they like to use someone else's money rather than their own. I understand some of you are in a debt-free community, so you have that mentality. But if you've ever been around wealthy people on a personal level, you'll know a good amount of them love to use other people's money instead of their own.
There are multiple reasons for that, but to say that wealthy people don't use credit scores and they don't need them, that's false, and that should be considered a myth.
But let's get right into it. It says, "If you've been carrying credit card debt, you could see a drop in your credit score soon. Fair Isaac Corp, the creator of the FICO score, announced today, January 23, the new FICO 10 model, which is expected to cause scores to fluctuate roughly 20 points. This change comes on the heels of the average FICO score hitting the record high of 703 earlier this month. The new credit scoring model will be calculated to incorporate consumers' account balances for the previous 24 months, which is bad news for anyone carrying balances month-to-month."
These changes are expected to widen the gap between people with good credit scores (670 to 739) and those with bad credit scores (below 580). It says, "Those consumers with recent delinquency or high utilization are likely going to see a downward shift, and depending on the severity and recency of the delinquency, it could be significant," Dave Shellenberger, FICO VP of Product Management, says.
Now, I'm going to stop right there. Everything that was just said is what I've been saying on this channel for the past three to four years since I've had this channel. I've been telling people, "Watch your utilization. Keep your utilization low. Don't carry balances." Not only is it not a good idea because of the interest that you're going to continue to pay with carrying balances, it's also not a good idea for your credit score.
I've been telling people, "Hey, learn the habit of paying off whatever you spend on a month-to-month basis." Some people use their credit cards like a debit card, where if they go make a purchase, they pay it off once it posts. Some people pay off their credit card debt every two weeks. Some people wait until they get their statement. This is me, and then they pay their statement balance.
Either way, there are people who are practicing habits of paying off whatever they spend. But there are also people—the number is well above 70% of people with credit cards—who carry over balances. If it's 70% of people with credit cards carrying over balances, that is considered the majority.
Unfortunately, the majority of people who are doing this are going to be negatively impacted by FICO Score 10, and it's coming this upcoming summer. This is from FICO themselves; they stated it as you can see in the article.
I want you all to know if you don't start practicing better habits with credit cards, it's going to not only impact you in regards to your credit card debt, but it's also going to impact you with your credit score.
Like I said earlier, that 20-point drop could hurt a lot of people—not just some people, but a lot of people.
We're going to get further into it. It says, "FICO estimates that roughly 110 million consumers will see a change to their credit score once the new model is in effect later this summer. Approximately 40 million consumers will see a shift upward 20 points, and another 40 million will see a shift downward."
It says, "This isn't consumer unfriendly," John Alzheimer, an expert on credit scores and credit scoring, tells Select. "People with good credit are going to score higher with the newer models. People who have elevated risk are going to score lower. That's always what you see in a newly developed model when you compare score distributions to older models."
So there you have it. You have it from CNBC, you have it from FICO, and you have it from other credit experts. This is a warning, and it's a warning from Water Your Soil.
I always warn you. Some of you agree with it, which is why you continue to come and watch. Some of you dislike it; you can't stand it, which is why you unsubscribe and do all the other things that you do and you talk about this channel and you put it down.
But my goal for this channel is to get the truth out. Whether people love it or they strongly dislike it, no matter what it is, my goal is to put the truth out and to let people know what's coming.
The truth is human beings are often not fond of someone telling them that they need to be more responsible with their spending and with their credit cards. They would rather me get on here and talk about the great advantages of piling up points and getting points to travel here and there and the benefits of what they did stacking up their points.
That's what you want to hear from me, and I know that's what some of you want to hear from this channel. But my goal since day one has been to get on here and educate people about how credit scoring works and how to take advantage of these credit cards to benefit you—not only just go and get points with these credit cards, but the biggest benefit, which is increasing and maintaining your good or excellent credit score.
If you don't have a good or excellent credit score, it's for you to grow your credit score to the good and excellent range, and that's the goal.
As you can see from this article, it's coming. You're going to need to be more responsible. If you are someone who is responsible, like a lot of my subscribers, you're going to benefit from this. The article clearly states it: your score is more than likely going to increase.
However, if you're in the other group and you carry over balances and you have high utilization, you're out here maxing out credit cards or at least getting near that credit limit, this will have a negative impact on your credit score.
There's no other way to put it. It's not pretty; it doesn't sound good, but it's the truth. I just want you all to know that, which is why I bring these news articles to let you all know what's about to happen.
Hopefully, those of you who are out there and you're carrying high balances and you have high utilization and things like that, you start to make those changes that will help you and spare you in the future when it comes to this FICO 10 and FICO 10T.
But I just wanted to bring this news article to you all. Like I stated, the link to the article is in the description box. You can read it yourself. I'm not a fan of misleading people, which is why I always put the link to these articles in the description box. That way you can read it yourself and come out of the article with your own perspective if need be.
But anyways, if you're new over here and you're feeling the vibe, this is Water Your Soil. Be sure to hit the subscribe button. Make sure you do turn on all notifications. That way you don't miss a future video because I post often. That's clicking on the bell that I mentioned earlier and selecting all.
Also, this goes to every single one of you, my subscribers included. Be sure to hit the like button. It literally takes one second. Hit the like button, let the algorithm know you support this video and this channel.
I appreciate every single one of you for taking out the time to watch. This is Water Your Soil, and I'm out.
What's going on? This is NE from Water Your Soil. So as someone who went from a 5.49 credit score all the way up to the 800s, I decided to share the same information that helped me go from poor credit to excellent credit.
This book is titled "Strategies to Master Credit." I put everything in this book—everything that helped me go from poor credit to excellent credit. All of the information is in this book.
So I want you all to purchase this book. A lot of you have already purchased it, but it's available currently right now on amazon.com and also mastercreditbook.com. It's titled "Strategies to Master Credit." You want this book; it has all the information needed in order for you to go from poor credit to excellent credit or just simply maintain your good or excellent credit score.
So get the book ASAP. If you want something more in-depth, you could take the course over at www.water.com. It's more in-depth. There are actually chapters in this course, and it walks you through basically how FICO credit scores come about and how they're determined.
Really, once you learn how FICO scores come about and the concept of credit scores, then you're pretty much on your way to either going from poor credit to good credit or just maintaining a good or excellent credit score.
So if you want something more in-depth, I have the course over at www.water.com. All right.