Here's How It Works

he idea went like this: Pick a community with a low average credit score; give away copies of Hooey Savvy's Cookie-Wise Pablo to kids at one school; challenge another local community to see which could improve its credit score most in a year; winner gets local bragging rights and better lending rates.

Unfortunately, from the research I've done and the people I've spoken to, that's not how it works.

A couple years ago Consumer Reports (CR) ran a piece about credit score companies and which one to go to for one's score. Along the way, CR did a nice job of educating the reader about who creates credit scores (lots of folks it turns out including Ford and I'm sure other car companies) and who uses the scores (lenders such as banks for mortgages or car dealerships for financing). So what did CR conclude?

"These credit scores probably aren't worth your money."

Not only is that not reassuring, but a disclaimer that one of the scores isn't even sold to lenders and is "not an endorsement or guarantee of your credit worthiness as seen by lenders" is scary. This sounds a lot like the testimony given by rating agencies before Congress that only said they provided "opinions" on creditworthiness. In other words, at the end of the day, lenders are going to choose which of your scores they like best (read can take you for).

As CR learned, one person can have a variety of credit scores, say, from good to excellent. So if I'm a lender and I see someone who qualifies as excellent, I'll want to lend to them, but at the "good" score rate to make more money.

Consumers have the power to ask what score a lender is using, but if you really need that loan are you going to bust the lender's chops? If you're the lender, are you going to take any flak from someone who needs your money when there's another sucker being born in your waiting room?

Lenders picking whatever number they want is bad news for borrowers. What's inconceivably worse than that? A bank (GS Capital Partners, take a wild guess what the GS stands for) buying a credit scoring company (TransUnion). What's to keep them from making everyone pay through the nose?

If I can't promise people that better credit scores will directly lead to better lending rates, I won't. Fortunately, I've come up with another idea which I'll bounce off folks in Texas when I get there next week.

Your Community on Hooey

s I work on the Kickstarter proposal and marketing plan for Hooey Savvy's Cookie-Wise Pablo, my kids book on financial education, I really want to show that it can have an impact on a community. To that end, I'd like to quantify that impact by tracking one community that reads Hooey against another similar community that does not.

Unfortunately, I sincerely doubt a single kids book can improve the average credit scores of a community in one, three, six or twelve months. It may take years. But, hey, you never know. Long story short, I'd like to show folks the progress they've made in a tangible and/or quantifiable way. What I do know is that it shouldn't take millions of tax payer dollars to achieve.

In Nudge, a book about libertarian paternalism, the authors, economists at the University of Chicago, give numerous examples of clever government initiatives that yield big results at little cost. Competition and public humiliation always seem to go down well. In this case, we could pit two communities against each other to see who can improve their average credit scores the most in a year...with the scores updated monthly in the local paper or painted on a wall in a very public place for all to see. Throwing in a prize for the winner (other than better credit scores and lending rates) never hurts. Getting elected officials to line up behind an out-of-towner might hurt.

Project Updates: Got a rather uncompetitive quote from the L.A. illustrator and so the search continues. Am hoping folks in Texas will be up to the task. Floramay Holliday is interested in giving some of Hooey's songs a go. She's got a great voice, lots of experience and a natural way about her music. I'm excited to hear what she comes up with. Thank you, Dewey Ervin, for bringing her talent to my attention. Have a meeting with Equifax next week in Atlanta. Looking forward to learning more about the company. Early work on my baseball work of fiction, The Boston Squeeze, continues to come together a little everyday.