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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: russwinter who wrote (46556)	12/4/2005 11:54:31 AM
From: Ramsey Su	Read Replies (1) of 110194

Feb 1 2006 - G.R.E.B.B. DAY (Greenspan real estate bubble bursting day) I believe FICO is misused and over used. FICO is a basically a numeric reflection of credit usage and repaying history under a set of circumstances. These circumstances are dynamic and will greatly alter the behavior of individuals. Debt income ratios, on the other hand, are based on reasonable and logical assumptions. How much should a typical household spend on housing, cars, food etc etc. FICO scores have dominated underwriting standards in recent years while debt/income ratios have been bypassed via state income or simply ignored. When times get tough, household cashflow will dictate their ability to pay, not their FICO score. This is a long way of saying that I agree with you. I have always been curious as to what percentage of the population is at what fico score. We will soon find out how FICO scores will change when the economic conditions change.

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