Credit, Debt, and the New FICO 10 Reality
When you pull out your credit or debit card to make a purchase, most of the time you don’t give it much thought. It’s just part of daily life.
Financial expert Dave Ramsey, however, takes a different stance. His philosophy is that you should live without a credit score at all, because it only measures how well you handle debt, not how you build wealth. He even calls it your “I love debt” score.
His approach — living on cash and staying completely debt-free — absolutely represents one form of financial freedom. But for many people, there are times when using credit strategically can actually be the smarter move.
For instance, investors often borrow against their brokerage accounts (called margin) to increase buying power. Yes, it’s risky, but when rates are low and your returns exceed your borrowing costs, it can make financial sense. The same principle applies to well-managed personal debt: credit can be a financial tool when used intentionally and with discipline
🧠Enter FICO 10T — The New Lens on Credit
The new FICO 10 scoring mode changes how lenders measure your behavior. The “T” stands for trended data, meaning it looks at your financial habits over the past 24 months — not just your most recent balance.
If your debt is trending downward, you’ll likely be rewarded.
If you’re racking up new balances or missing payments, your score will take a sharper hit.
This long-term view paints a fuller picture of your credit habits — not just one good or bad month.
It could also benefit users of Buy Now, Pay Later (BNPL) services as repayment histories start reporting to credit bureaus, giving more people a fair chance to build credit responsibly.
Initially, this change will roll out in the mortgage market, as Fannie Mae begins using FICO 10T for underwriting in late 2025. The goal: modernize risk assessment and help lenders see beyond a single point in time.
đź’ˇ The Bigger Takeaway
Debt itself isn’t evil — mismanaged debt is.
True financial strength lies between Ramsey’s “no-debt-ever” mantra and Wall Street’s “borrow to the moon” mindset.
It’s not about whether you use credit — it’s about how you use it.
FICO 10T rewards consistency, progress, and discipline — the very traits that define financial health.
Because at the end of the day, a strong score isn’t about loving debt.
It’s about mastering it.
Jerry Williams
Host, The Pink Money Podcast | Financial Educator
With over 20 years of experience in the financial services industry, Jerry has worked as a financial and wealth advisor, guiding individuals and families to grow and protect their wealth. His mission has always been clear: provide actionable advice, demystify complex financial concepts, and help people make confident, informed decisions.
Jerry earned his BS from St. Edward’s University in Austin, Texas, and his Master of Science in Personal Financial Planning from the College of Financial Planning. Today, he uses that background to not only cover practical money topics but also to explore cultural conversations, personal growth, and the ways financial choices intersect with identity and community.
When he’s not podcasting, Jerry enjoys writing think pieces, curating Jerry’s Playlist (a celebration of music and culture), and encouraging listeners to think critically about the world around them.
🌍 Heard in 14+ Countries!
