Investing Daily: Investing in America’s Credit Addiction — Breaking Down FICO

Welcome to Market Mondays! In this thought-provoking clip, Rashad Bilal, Troy Millings, and Ian Dunlap break down the fundamentals of FICO—your adult "transcript"—and explore why understanding your credit score is more important than ever. Whether you’re just starting your financial journey, rebuilding, or leveling up, this segment’s “building block, corner” is packed with essential insights! Rashad Bilal shares how explaining FICO to his son made him realize that your credit score is truly your adult report card, shaping everything from your ability to buy a home, lease an apartment, land a job, or finance a car. Troy Millings calls FICO your “financial trust score,” noting how crucial it’s become even for career opportunities. Ian Dunlap points out that FICO isn’t just a score—it’s a public company (Fair Isaac Corporation), and its stock performance tells a story of monopoly power and skyrocketing growth since its IPO in 1987. Dig into the business side as Ian Dunlap reveals how FICO actually earns its billions by licensing the credit score algorithms, not directly selling scores, and how economic cycles—like low interest rates—can supercharge its profits. You’ll hear about how FICO’s stock price exploded after 2010, paralleling changes in credit reporting’s importance after the Great Recession and new legislation. The trio also ties credit’s cultural impact to music, echoing Wu-Tang’s “Cash Rules Everything Around Me”—but now, as Rashad Bilal says, “Credit rules everything around me.” Learn how the shift to a cashless society has made understanding and managing your credit more vital than ever. They even shout out iconic artists like Clipse and discuss how staying sharp and following trends (even in music!) intersects with financial literacy and generational wealth. Whether you’re curious about why FICO matters, how its monopoly works, what’s changed since the ‘80s, or how credit touches every aspect of modern life, this clip delivers the essentials. Tune in for practical knowledge, cultural connections, and expert takes from Rashad Bilal, Troy Millings, and Ian Dunlap. *Don’t miss:*

• The hidden monopoly behind FICO’s business
• Why your credit score shapes your future, career, and finances
• How shifts in culture and technology made credit king
• FICO’s stock market success story
• Real-world tips on building credit and wealth

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Episode Transcript

Speaker 1 (00:00):
So let's start with building block corner.

Speaker 2 (00:04):
We could start that like a new segment of like,
you know, things that you just need to know, whether
you're just starting out on your financial journey rebuilding or
just trying to figure out. And it's something that my
son had asked me a while ago as far as
like credit, like what is FIICO? And I thought that,
you know, what I described it a while back was
that I feel like FICO is your transcript as an adult. So,

(00:28):
like you know, as a child, you have a transcript
in high school, right, and that transcript is vitally important
because what that transcript says.

Speaker 1 (00:39):
Pretty much determines where you're going to go to college.

Speaker 2 (00:41):
Right, So they're making decisions based off of your grades
nine times out of ten, actual curricular activity and stuff
like that. But they're making decisions based off of your
grades in your report cards for four years to determine
what type of students you're going to be. Sometimes they're wrong,
sometimes they're right, but that's what they're going to do. Right,
as an adult, your report card doesn't really matter, But

(01:05):
what does matter is your credit score. Yeah, so your
credit score they're making a bank is going to make
a decision whether you're worthy enough to get a loan
to buy a home, whether you can live in this
apartment sometimes, whether you can.

Speaker 1 (01:17):
Get a job, whether you can get you.

Speaker 2 (01:19):
Can't get a car, whether you're going to pay an
extra two hundred dollars a month for the car. Because
they're seeing if you're a responsible person or not, and
how they're determining your responsibility is based off of your
FICO score.

Speaker 3 (01:31):
Yeah, the interesting thing about Fyco was, like most people
hear about it, they don't even know it's a publicly
traded company.

Speaker 4 (01:39):
And one of the best in the market, one of
my favorites.

Speaker 3 (01:41):
If you look at this charts over the past five years,
you've see how crazy it's going. But most people realize
when it's too late, right, they'll figure out, I got
to figure out my credit score.

Speaker 1 (01:50):
Who who is Fyco? And so the.

Speaker 3 (01:52):
Idea of bureaus coming together to give you a score
that really are pretty much going to determine, like you
said that transcript about trust, whether you're going to be right,
Like can we loan to you, whether that's for a car,
whether it's.

Speaker 1 (02:03):
For a home, or whether that's for trying to get
a job.

Speaker 3 (02:07):
Like that score is so important, and so when I'm
looking at I'm like, how do they actually make money? Right,
So they don't actually sell credit scores. They actually license
the algorithm for the credit scores, and if you're in
any financial institution, people are going to track your credit scores,
so they get to sell that over and over again.
When do they make the most money, Well, when you
see people actually trying to buy homes and so when

(02:30):
interesting is a low, when people are readfindancing.

Speaker 1 (02:33):
You just watch fighters chart.

Speaker 3 (02:35):
That's one of those tippits that most people don't think about,
but everybody has to use, especially if you're in America.
Right if you're trying to invest, especially in real estate
or like I said, trying to get a vehicle, you're
going to need that score. And once they know you
needed an interest rates drop and money becomes more affordable
to people, they're like, all right, well, this is the
time that we should be watching this company and actually
reported last week. So these are those little tippits that

(02:58):
people don't talk about in finance that you should know.

Speaker 4 (03:01):
One of the best performing stocks in the last ten years.
And on top of that, they have a quiet monopoly
that most people don't think of. I've always been told
to think of your FCO score as your financial trust score,
and I think you guys both touched on it. But
it's a lot of people who have been turned away
from amazing careers because that score wasn't high. So it's

(03:22):
really important. Kudos to Edwin broadcasting all the time.

Speaker 1 (03:27):
So about it is eight fifty, So.

Speaker 4 (03:30):
Kudos to my brother, yeah, MVP in all areas of life, yo.

Speaker 1 (03:35):
And I think the last thing that.

Speaker 2 (03:39):
Is interesting about this is, like, you know, Fyco, as
you said, is a traded stock on the stock market, right,
So what happened is that when it it iPod in
nineteen it iPod in nineteen eighty seven at one dollar

(04:03):
and forty cents, nineteen forty seven, one dollar forty cents.
It's currently trading at seventeen hundred dollars and thirty cents.

Speaker 1 (04:12):
But if you really look at the chart, it really
started to go crazy.

Speaker 2 (04:18):
It really started to go crazy around twenty fourteen, twenty twelve, twenty,
let's just say twenty ten. After twenty ten, it started
to take off tremendously. Right if you look at the
financial markets, right, especially after the Great Recession, DoD Frank

(04:40):
all this and it says a lot about the economy
that we're in right now, the importance of credit scores.
If you look at how the world was shape in
nineteen eighty eight, your credit score was a completely different
metric of meaning as far as your life importance than
it is in twenty twenty five. You can't even really
live without credit score right now. Well, it says a

(05:01):
lot about the times when that we're in. But to
put it in perspective, the stock is up eighty five
thousand percent since.

Speaker 1 (05:07):
Since power of long term holding yep inane, it's up
eighty five thousand percent.

Speaker 4 (05:14):
And the importance of intellectual property that others cannot easily.

Speaker 3 (05:17):
Recreate, Yeah, I mean you're talking about us. That that
was up at twenty four hundred dollars. And so if
you look at that peak, look at look at that
pandemic run right from like twenty nineteen where it's traded
under six thirty to that twenty.

Speaker 1 (05:31):
Four hundred dollars run. That's an incredible run.

Speaker 3 (05:34):
And that was pulled back a little bit, right, there's
some uncertainty, right, we've seen it over the past three years.
We saw the market pulled back in twenty twenty three,
and so there's still some uncertainty. But here's one thing
that's gonna until America changes the credit system. Right, this
is a company that's not going anywhere, and this is
one of those.

Speaker 1 (05:49):
Companies and you're gonna need. Yeah, You're absolutely gonna need.

Speaker 2 (05:52):
I mean it's like you know, once again, Wu Tang
when they said in ninety six, cash fows everything around me,
and then we actually made that T shirt when we
first started that cream.

Speaker 1 (06:03):
Credit rules everything around me.

Speaker 2 (06:04):
And you've seen it happen in real time right now,
how the monetary system has changed to become a pretty
much cashless society at this point in time, and everything
is run on credit. So understanding the credit credit credit rules,
it's like the clip song fight on Yea yeah yeah.

Speaker 3 (06:20):
Shout out to them, Shout out to them. Man, Grammy nominated.
I know that they talked about how important the Grammys
were to them in gwyned one that got nominated for
five Grammys. I see them winning at least three or
four of them.

Speaker 1 (06:33):
I definitely got it.

Speaker 4 (06:34):
And honestly, one of the greatest campaigns of the last
ten years, just like one long rollout of quality and video,
music and fashion.

Speaker 1 (06:46):
It's been a master marketing standpoint.

Speaker 2 (06:48):
They had the best rollout that I've seen in years
to the nation, their whole team, because I've never seen
somebody that man they was on. They would think that
there was Michael Jackson. As far as how many artist
cools that they had written about them. And then you know,
interview Vatican. They've performed the Vatican. That's one hundred percent
and just good people man like you know Malage, somebody

(07:09):
that's been highly respected for a very long period of time.

Speaker 1 (07:11):
See him step away and then step back like he
never left.

Speaker 2 (07:13):
Push a t somebody that we've run into a few
times at our spot in Paris. We interviewed them reliabilities,
you know what I mean. He's a super smart dude
as far as getting money from on the medical side
with medical transportation companies, and he got a bunch of
stuff from the McDonald's licensing deal.

Speaker 1 (07:29):
He talked about that before. So you know, these.

Speaker 2 (07:31):
Guys are not just successful for no reason, like they're
really smart, Like I think hustling because they are.

Speaker 1 (07:37):
The last thing I say about this is I think the.

Speaker 2 (07:38):
Clips they've solidified hustling, right, But hustling is not just
a matter of you know, just hustling on the street corner,
Like you really got to stay up to the times.
You gotta be in tune what's going on, and you
gotta actually have a sharp mind. So even for them
to like, you know that fight go like you're talking
about to stock fight go like that's like, you know,
you got to be understanding what's going on right now

(07:59):
because the world is moving so quickly that if you
pay attention to trends, you could you could make money.

Speaker 3 (08:04):
Yeah, and the best teacher has always been music, especially
for us, Like we grew up just listening to music
and trying to learn things. So when I looked at
the track list, I said A fight call. I said, all,
all right, this is something we got to tap into.

Speaker 1 (08:13):
Man,