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Speaker 2: The greater number of one time payments that you accumulate,
Speaker 2: the more season your credit profile is considered. Right, and
Speaker 2: we'll get more specific with that. These timely payments form.
Speaker 2: What's the basis of your borrowing power? You guys? Throughout
Speaker 2: this presentation, you guys are hearing me say barring power
Speaker 2: a lot, right, and barring power just means your ability
Speaker 2: to borrow and at what terms are you able to
Speaker 2: borrow at? Right? Lenders utilize this term frequently and it
Speaker 2: just means how risky do they assume you are based
Speaker 2: on your credit profile. Right, what what what what history
Speaker 2: or what what borrowing abilities or debt management skills does
Speaker 2: your credit profile speak to based on the history of
Speaker 2: your accounts?
Speaker 1: Okay?
Speaker 2: So, in other words, your barring power does not align
Speaker 2: just with your credit score, does not necessarily align with
Speaker 2: with your credit score. Right. There are so many individuals
Speaker 2: who have a high credit score, good credit or or
Speaker 2: or or vice versa, and they their barring power may
Speaker 2: not match their credit score. Right because, contrary to popular belief,
Speaker 2: your your credit score and your credit profile are two
Speaker 2: totally separate things, right, And then another thing on top
Speaker 2: of that, lenders are not as concerned with your credit
Speaker 2: score as we are as consumers, Like we're more concerned
Speaker 2: with our credit scores. Excuse me, guys, We're more concerned
Speaker 2: with our credit scores than lenders are. Right. So, when
Speaker 2: you are filling out a credit application, your credit score
Speaker 2: is not the determining factor on if you will be
Speaker 2: approved for said card or car or home. Right, it
Speaker 2: has a little, it has a little to do with it. However,
Speaker 2: it's never going to be the deciding factor. It's always
Speaker 2: going to be your credit profile. Right, And that just
Speaker 2: means what makes up the last seven years of how
Speaker 2: you've behaved in your credit, right, what does that speak
Speaker 2: to the history on all of your accounts and all
Speaker 2: of that right now, the total number of late payments
Speaker 2: on each of your accounts, as well as the ratio
Speaker 2: of accounts with late payments to those without, both influence
Speaker 2: how many points you're actually getting of those one hundred
Speaker 2: and ninety two point five. And in other words, to
Speaker 2: make it very simple, not only are you judged by
Speaker 2: how many one time payments that you have versus mispayments,
Speaker 2: but another factor that goes into determining how many of
Speaker 2: those points that you're getting is how many accounts that
Speaker 2: you have that has never had a lay payment. So
Speaker 2: let's just say you have five accounts on your credit report,
Speaker 2: and then three of them you've been late within the
Speaker 2: last seven years, you would only have two accounts with
Speaker 2: one hundred percent positive payment history for seven years, right. So,
Speaker 2: in other words, if you want to obtain as much
Speaker 2: of these points as possible, or hopefully every single one
Speaker 2: of them, you would not only have to have no
Speaker 2: lay payments for the last seven years, right, but you
Speaker 2: can't even have like derogatory accounts collections or charge offs
Speaker 2: in all of that right now, Just to relieve you
Speaker 2: guys a little bit, you are not expected to have
Speaker 2: a perfect credit score. In fact, only one percent of
Speaker 2: the population has a perfect credit score of an eight
Speaker 2: point fifty, So you don't actually have to strive for
Speaker 2: a perfect credit score in order to have substantial barring power. Right,
Speaker 2: And that's what I wanted to talk about today, Just
Speaker 2: little things that you can do, that you can change
Speaker 2: starting today that'll impact your barring power in a positive way. Okay. Now,
Speaker 2: other factors that goes into determining how many points you're
Speaker 2: getting is the time since your last mispayment, the degree
Speaker 2: of lateness, So obviously you can be thirty days late,
Speaker 2: sixty days late, ninety days late, up to one hundred
Speaker 2: and twenty days late.
Speaker 1: Right.
Speaker 2: The type of account that you have a lay payment on,
Speaker 2: there is a hierarchy to lay payments, right, a hierarchy
Speaker 2: in the sense that, for example, mortgage accounts, lay payments
Speaker 2: on mortgage accounts are considered the worst type of lay payments.
Speaker 2: So if you have a mortgage and you have a
Speaker 2: lay payment, that's one to wag weigh more heavily in
Speaker 2: a negative way on your barring power. And your credit
Speaker 2: score than if you were lay on let's say a
Speaker 2: credit card. Right, So the hierarchy is mortgage accounts those
Speaker 2: are the top dog, auto loans, revolving accounts which are
Speaker 2: credit cards, and then retail accounts. So those are going
Speaker 2: to be like your furniture accounts. If you have a
Speaker 2: retail credit card or something like that, those are like
Speaker 2: considered you know, low level accounts. Therefore their lay payments
Speaker 2: of course still does affect you, but it does it
Speaker 2: impacts you less than the other account types. Okay, again,
Speaker 2: how many one time payments you add to your payment
Speaker 2: bank will speak more to your barn cards. So the
Speaker 2: more on time payments that you have, the better, the
Speaker 2: better your credit profile is. Right, here's the tip. The
Speaker 2: top one percent of borrowers one percent meaning like obviously
Speaker 2: they get the top offers. The top one percent of
Speaker 2: borrowers have successfully made more than five hundred on time
Speaker 2: payments on their credit profile. Right. Remember that five hundred number,
Speaker 2: because just the little tipig trick between me and you,
Speaker 2: the that your credit profile records five hundred at least
Speaker 2: five hundred payments within the last seven years, you immediately
Speaker 2: you immediately your your credit profile gets taken up to
Speaker 2: the top threshold. The contingency, I want to say, the
Speaker 2: contingency is if you like, this does not work if
Speaker 2: you've had a collection within the last twenty four months. Okay, now,
Speaker 2: if you have had a collection within the last twenty
Speaker 2: four months, your credit profile will still be ranked higher
Speaker 2: than what it would have before you had five hundred payments.
Speaker 2: But if you don't have a collection within the last
Speaker 2: twenty four months, that is a sort of like cheat code, right,
Speaker 2: it's a cheat code in order to take your credit
Speaker 2: profile to what's probably a lower level based on whatever
Speaker 2: your your credit profile looks like, immediately to the top
Speaker 2: ranked amongst the top borrowers. Right. And there are tiers
Speaker 2: when it comes to barring power. Right Like, two people
Speaker 2: can apply for the same application, they can even have
Speaker 2: the they can even have identical credit scores, but they're
Speaker 2: not going to have the same barring power. Right Like,
Speaker 2: one may get approved for one thousand dollars, one may
Speaker 2: get approved of five hundred dollars. And how much you're
Speaker 2: approved for is determined off certain things that you have
Speaker 2: shown on your credit profile. And in this example, the
Speaker 2: goal should always be at least five hundred payments within
Speaker 2: the last seven years, right, And that sounds like a lot,
Speaker 2: but it's not a lot because I've already done. I
Speaker 2: did a calculation for you. All you have to do
Speaker 2: is have six accounts which will will record seventy two
Speaker 2: payments per year towards your payment history for seven years.
Speaker 2: So if you maintain six, if you maintain at least
Speaker 2: six accounts, and if you have student loans like this
Speaker 2: is very easy to do. If you maintain if you
Speaker 2: maintain at least six accounts for you know, over over
Speaker 2: the course of seven years, then you'll get your five
Speaker 2: hundred payments. Now. Obviously, if you have more accounts than that,
Speaker 2: then you'll you'll reach it faster. Right, But that's one
Speaker 2: of the for sure ways to ensure that you are getting,
Speaker 2: depending on the rest of your profile, all it or
Speaker 2: most if not all, of those one hund ninety two
Speaker 2: point five points, right. So that's sort of a way
Speaker 2: to make your credit profile resilient. Right, Like if you
Speaker 2: do if you are getting most of those points or
Speaker 2: all of those points, things are not going to impact
Speaker 2: you as much as they would impact someone else that's
Speaker 2: not getting all of the payment history points because it
Speaker 2: is the largest factor of your credit score, and it
Speaker 2: lends more than more than any other category. Right, So
Speaker 2: remember that five hundred payments will automatically make your credit
Speaker 2: profile considered experience automatically. It's not an opinion thing, it's statistically.
Speaker 2: If you have five hundred one time payments obviously not
Speaker 2: lay payments. So five hundred one time payments recorded, which
Speaker 2: again in the last seven years, your credit profile will
Speaker 2: automatically be considered experienced, okay. And make sure they're on
Speaker 2: primary accounts. So if it's an authorized user account, they
Speaker 2: don't they don't. They don't impact your barring power the same,
Speaker 2: So make sure you are doing these with primary accounts, okay.
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