Speaker 1: Well, Merry Christmas buddy, same to you. Yeah, so obviously
Speaker 1: this is Christmas Day. We hope that maybe there's like
Speaker 1: a Christmas Ham going on inside the house, like like
Speaker 1: amazing flavors wafting through the house. Maybe you're outside in
Speaker 1: the cold shoveling some snow. Basically, it's like that's where
Speaker 1: you live. It's like a Norman Rockwell painting, except for earbuds.
Speaker 1: You've got those in your ears. Those did not exist
Speaker 1: back then.
Speaker 2: And you're like, what are Matt and Joel Eve been
Speaker 2: doing working on Christmas Day? Are they like ebenez Or
Speaker 2: screws They don't take of course.
Speaker 1: Yeah, we've recorded this ahead of time, but we did
Speaker 1: want to make sure that you had an episode here
Speaker 1: in case you were stay outside working shoveling snow or
Speaker 1: something like that. Maybe you're on the road to visit family,
Speaker 1: loved ones, some friends. But we've got an episode here
Speaker 1: to line up for you where we are busting up
Speaker 1: some of the different credit myths that exist out there.
Speaker 1: This is one of our besty episodes.
Speaker 2: Yeah, there's a lot, there's a lot of bogus information
Speaker 2: when it comes to getting your credit score right. It's
Speaker 2: such an important part of your personal financial life, and
Speaker 2: so we figured, hey, we're not on a Christmas they
Speaker 2: we'll toss this one out there. So thank you, as
Speaker 2: always for listening to the show. We hope you enjoy this. Besty,
Speaker 2: Welcome to How the Money. I'm Joel and I am Matt,
Speaker 2: and today we are busting up some credit score myths.
Speaker 2: Credit scores, baby, everybody's got one. It's kind of like
Speaker 2: a belly buddy like.
Speaker 1: But oh, it makes me think of everyone poops. Did
Speaker 1: you know that book? Yes? I do. I think that
Speaker 1: book's on my mind because we are considering potty training
Speaker 1: Westy to cut out diapers from our monthly grocery.
Speaker 2: But wouldn't that be nice?
Speaker 1: Girl?
Speaker 2: Are y'all thinking about doing that soon? Yeah, we'd like to.
Speaker 2: It's but the problem is, you know, you have three girls.
Speaker 2: I have two girls, and everybody says it's so much
Speaker 2: easier to potty train girls. So I'm like, we really
Speaker 2: nervous about potty training a boy.
Speaker 1: Yeah, we've pulled down the the little Ikea Green, the
Speaker 1: Green and white little Ikia body got the same heat.
Speaker 1: Westy's totally interested in it. We just haven't pulled the
Speaker 1: plug yet. But I told Kay the last package of
Speaker 1: diapers that we just got. I was like, that is it, Like,
Speaker 1: let's commit, let's do it. We're gonna cold turkey do
Speaker 1: the thing where you know, there's this whole approach I
Speaker 1: don't want to go into, takes like a full weekend
Speaker 1: of dedicated. Yeah, Like there's this approach where you just
Speaker 1: go cold turkey and you just let them go all
Speaker 1: eyes on the little dude, and basically they don't like
Speaker 1: that feeling of having just soiled themselves, and so they
Speaker 1: quickly learn like like even at night, no pull ups,
Speaker 1: nothing like that. Just like everyone poops, everyone does have
Speaker 1: a credit score. And that's what we're talking about today.
Speaker 1: That's right.
Speaker 2: Yeah, But before we get to that real quick, mat,
Speaker 2: I just want to mention it is the beginning of
Speaker 2: spring right now. Basically like warmer weather and what happens
Speaker 2: when the weather gets warm.
Speaker 1: The flowers are blooming, that's true, but.
Speaker 2: Also the bugs come out, right and so especially in
Speaker 2: the South. Like I just had a tenant email me
Speaker 2: the other day and she's like, hey, by the way,
Speaker 2: I want to let you know, start to see some
Speaker 2: more bug activity at the house, which is my reminder
Speaker 2: that it's time to spray for bugs and.
Speaker 1: For some diy pest control exactly.
Speaker 2: We've talked about this a few times over the years,
Speaker 2: but it's worth revisiting because, Yeah, I wrote an article
Speaker 2: up on our site at how to money dot com
Speaker 2: just telling people how to do it themselves. And it's
Speaker 2: amazing how much money you can save because a lot
Speaker 2: of our listeners are probably paying something like one hundred
Speaker 2: dollars a quarter to a pest control company to come
Speaker 2: for a quarterly spraying. So let's say you're spending four
Speaker 2: hundred dollars a year to combat bugs to keep them
Speaker 2: out of your house, Well you can diyatt and literally
Speaker 2: you will shell out no more then and actually less
Speaker 2: than one hundred dollars and in the beginning. And that's
Speaker 2: supply the sprayer and the chemicals. And this is not
Speaker 2: the chemical that you can buy at home depot, by
Speaker 2: the way, this is the chemicals that the pros use.
Speaker 2: You can get both for like, you know, roughly in
Speaker 2: the range of seventy bucks.
Speaker 1: Yeah, and you're not just buying like a little spray
Speaker 1: bottle to like, you know, spray a bug by Like,
Speaker 1: this is professional grade stuff. And we crunched the numbers
Speaker 1: on it too, and literally once after do you get
Speaker 1: that you're only using something like two dollars worth of
Speaker 1: chemicals over the course of a year. Yeah, and so
Speaker 1: you're looking at four hundred dollars versus two dollars a
Speaker 1: year after that upfront cost, and it's easy to see
Speaker 1: that you are quickly going to be able to come
Speaker 1: out ahead.
Speaker 2: And I think most people might hear that and they're like, well,
Speaker 2: there's got to be a catch, right, something's in fear
Speaker 2: in this process, or you know what, I don't think
Speaker 2: I'm going to know be able to know how to
Speaker 2: do this. And fortunately there are instructional videos on some
Speaker 2: of these websites where they will show you how to
Speaker 2: do it properly and really honestly if any dummy can
Speaker 2: do it, so it's not something that takes special skills
Speaker 2: or anything like that. And just considering how much money
Speaker 2: can save you in one fell swoop, we're all kind
Speaker 2: of faced with higher rates of inflation, higher costs on
Speaker 2: almost everything. He's right now, if you're looking to save
Speaker 2: money in a big way in just like one fell swoop,
Speaker 2: this is definitely one thing to look at, absolutely.
Speaker 1: And something else I got to tell listeners about we
Speaker 1: have we talked about about my bug assault gun on
Speaker 1: the show before you know what, I'm not the one
Speaker 1: that blows air, No, is this one that shoots the salt.
Speaker 1: Oh that's right, Sorry, that's right, that's right. So I
Speaker 1: got this for Christmas and it is the coolest thing.
Speaker 1: It's this little so basically it's like a little pump shotgun,
Speaker 1: but it's made of plastic. It's a toy and it's
Speaker 1: got a little canister and you pour table salt in there,
Speaker 1: like like a tablespoon or two tablespoons worth of literally
Speaker 1: table salt. You close it up, you pump it, and
Speaker 1: when you shoot it, it literally shoots out like a
Speaker 1: little blast of.
Speaker 2: A little bit of salt, kind of like a shotgun pellet.
Speaker 1: It's literally a shotgun for bugs that shoots salt. And
Speaker 1: so this is the most fun I have ever had
Speaker 1: taken down little house flies in my house. I will
Speaker 1: link to it in our show notes because literally it
Speaker 1: is so fun. It's way more fun than the old
Speaker 1: bug zapper down to South Georgia, which very few people
Speaker 1: are aware of what I'm talking about here, But aside
Speaker 1: from the doipis control. If you want to get yourself
Speaker 1: a bug assault gun. I highly recommend it. I mean
Speaker 1: it does sound like fun. I might have to get one, dude,
Speaker 1: just for the sheer joy. Next time you all are
Speaker 1: over and there's a little house fly or nat or
Speaker 1: something like that, let me take it. I'll let you
Speaker 1: have a shot with it, because it is a ton
Speaker 1: of fun. Good. I appreciate that. And it's just salt.
Speaker 1: And so you miss, or even if you don't miss,
Speaker 1: you know, you pick up the five but then like
Speaker 1: all the salt, it just kind of disperses a little bit.
Speaker 1: But it's salt. It's like it's not that big of
Speaker 1: a deal. If there's a little bit of salt on
Speaker 1: the ground. Next time you're sweet or you a vacuum,
Speaker 1: you get it.
Speaker 2: Up off the floor and you barely notice it until then.
Speaker 2: I bet exactly nice. Okay, Well, word to the wise,
Speaker 2: do your own pest control, save you some money, and
Speaker 2: bug a salt gun. All right, and let's move on.
Speaker 2: Let's mention the beer that we're having on the show.
Speaker 2: This one is called Hello World, and it's by Spyglass Brewing.
Speaker 2: And this one will send to us by listener Gary.
Speaker 2: He sent us Monday's beer. Looking forward to having this
Speaker 2: one today and we'll give our thoughts at the end
Speaker 2: of the episode, but for now, Matt looking get onto
Speaker 2: the subject at hand. We are, of course tackling some
Speaker 2: credit score miss We're busting them up. And you know,
Speaker 2: it made me think, like there are all sorts of
Speaker 2: myths that have grown into legends over the years, over decades.
Speaker 2: H the lock disc monster is one of those, right,
Speaker 2: Paul bunyan UFOs, Like did they exist? Don't they?
Speaker 1: All sorts of these like they're just drones.
Speaker 2: You know, all of these things have developed outsized tales
Speaker 2: that make for interesting TV shows, and they're fun to
Speaker 2: talk about maybe on a Friday night over a nice
Speaker 2: craft beer with some of your friends, just kind of well,
Speaker 2: I don't know, is it real or isn't it? And
Speaker 2: it's the same as maybe like the legend with the
Speaker 2: moon landing being fake, although I don't know, that's just
Speaker 2: kind of less fun to talk about and not so
Speaker 2: small contingent of Americans, they continue to believe in the
Speaker 2: existence of like a sasquatch like creature roaming the woods.
Speaker 2: But yeah, some have latched onto these tales. They've taken
Speaker 2: them as one hundred percent factual. And you know, while
Speaker 2: I don't have definitive proof that Bigfoot doesn't exist, it
Speaker 2: certainly doesn't match up with what my eyes have seen firsthand.
Speaker 2: And part of the reason these myths persist is because
Speaker 2: there isn't documented evidence to the contrary, right, I mean,
Speaker 2: but credit score myths, on the other hand, well, they
Speaker 2: continue to exist despite hard evidence of their inaccuracies. And
Speaker 2: so that's why we're talking about this today. I mean,
Speaker 2: these these myths impact your finances in a real and
Speaker 2: ongoing way, So we've got to discuss them in a
Speaker 2: way that maybe your bigfoot obsession doesn't impact your day
Speaker 2: to day life, it's right, man, So and if it does,
Speaker 2: you've got a real problem.
Speaker 1: It's time to bust these myths up. And part of
Speaker 1: the reason too, that we're tackling this topic now is
Speaker 1: because of the fact that March it's National Credit Education Month.
Speaker 1: I bet you didn't know that.
Speaker 2: Oh yeah, there's a thing everything. There really is a
Speaker 2: love for everything these days.
Speaker 1: But there are also a lot of misconceptions and misunderstandings
Speaker 1: out there about credit scores and these myths. They lead
Speaker 1: folks to take just different paths like incorrect paths toward
Speaker 1: their credit It often impacts their score negatively, causing actual
Speaker 1: real side effects. And we want you to have a
Speaker 1: great credit score because it has such a wide ranging impact.
Speaker 1: Living without a credit score would be tough in a
Speaker 1: modern society, And like, is that a good thing that
Speaker 1: we have to function with a credit score? Not necessarily.
Speaker 1: We're not huge fans of the credit bureaus and you know,
Speaker 1: specifically their inability to keep our personal day a secure.
Speaker 1: But it's kind of like we've been put down in
Speaker 1: a game that we just can't stop playing. I mean,
Speaker 1: you could stop playing, but you would have to need
Speaker 1: a pile of cash in order to truly avoid the
Speaker 1: credit score system altogether, in order to completely skirt it.
Speaker 2: Yeah, it's kind of like even if you want to
Speaker 2: be an entrepreneur at age twelve, like you still got
Speaker 2: to finish high school. I mean it's it's it's part
Speaker 2: of the process, and.
Speaker 1: You don't have to.
Speaker 2: Your parents are going to get in big trouble if
Speaker 2: you don't, right, I mean it's.
Speaker 1: Is there some law like do you actually have to
Speaker 1: finish high school? No?
Speaker 2: I think you're going to get in big trouble if
Speaker 2: you drop out before before the age of sixteen.
Speaker 1: I didn't know that.
Speaker 2: Yeah, I think I don't know what the actual rules are,
Speaker 2: but I'm pretty sure you got to go to school,
Speaker 2: and to school, I mean you should, like I agree
Speaker 2: that that's probably it's probably a good, healthy approach to
Speaker 2: becoming a fully formed adult. I'm pretty sure the state
Speaker 2: can come after the parents if the kids come out. Yeah,
Speaker 2: if they take them out of school and there's no
Speaker 2: sign that they're doing any sort of homeschooling, what.
Speaker 1: Kind of country are we living in. I don't know.
Speaker 2: We might disagree on whether or not that's a reasonable thing,
Speaker 2: but it's reasonable.
Speaker 1: But I feel like people have a choice.
Speaker 2: Whatever, let's go, let's don't take your kids out of school.
Speaker 1: They need it. I'm not aid school, like my kids
Speaker 1: are going to go to college most likely to worry.
Speaker 1: I want other people to have.
Speaker 2: The choice if they choose not to, they choose to
Speaker 2: rip their kids out of school and just you know,
Speaker 2: send them down the Jeff Bezos path.
Speaker 1: Yea, the genius kid and they're able to take whatever
Speaker 1: remedial course or class where they're basically able to get
Speaker 1: the equivalent of a high school diploma. Of course, they
Speaker 1: should be able to do that.
Speaker 2: Right, Okay, all right, well, let's let's move on. Let's
Speaker 2: talk about what a good score is, because that kind
Speaker 2: of sets up this question of like, well, what are
Speaker 2: we aiming to achieve here with our credit score? And
Speaker 2: you know, Matt, you just mentioned one way to avoid
Speaker 2: the system would be to have just a ton of
Speaker 2: money ever loaded, right, Like you don't need a lender
Speaker 2: to approve you to buy a home if you've got
Speaker 2: five million bucks in the bank, and you can go
Speaker 2: buy any home that you desire. But since most folks
Speaker 2: don't have that, most folks don't have that much money
Speaker 2: on hand, especially these days, like to buy a home,
Speaker 2: it gets really expensive. In a car, same thing, right,
Speaker 2: cars are not cheap, so paying attention to your credit
Speaker 2: score is a must. But then the question is like
Speaker 2: what is a good score? And I guess you know,
Speaker 2: we have to tackle that because and it's actually kind
Speaker 2: of a difficult question to answer because there are different scales,
Speaker 2: like kind of like how we're talking about schools here,
Speaker 2: how some schools might have an a scale. An eighty
Speaker 2: eight could be considered an a I guess in some schools,
Speaker 2: or a ninety I remember in high school when migrating
Speaker 2: scale changed and it used to be a ninety two
Speaker 2: and up was an A, and then they changed it
Speaker 2: to a ninety enough was an A. Seriously, yeah, in
Speaker 2: the middle of high school, it's so weird. A couple
Speaker 2: of my my as I've always been ninety and above
Speaker 2: bs are obviously eighty c's or no, it's it depends
Speaker 2: on the school system. And so I distinctly remember, like
Speaker 2: two of my bees became a's all of a sudden,
Speaker 2: my GPA got a little.
Speaker 1: Bit higher, and so it's funny.
Speaker 2: Similarly, with credit scores, some of these bureaus have just
Speaker 2: a different threshold for what's considered good or great and
Speaker 2: so yeah, so the school that your lender sees when
Speaker 2: you're refinancing an auto loan, let's say, it can differ
Speaker 2: from the one that you get if you were to
Speaker 2: get that score directly from the bureau. And each bureau
Speaker 2: also has quite a few credit scores for you behind
Speaker 2: the scenes, so it's not even different models. Yeah, like
Speaker 2: there's this one score that you have for each bureau.
Speaker 2: It's like they might have a dozen scores for you
Speaker 2: based on different factors, and so the score your lender
Speaker 2: sees when you're refinancing an auto loan, let's say, can
Speaker 2: differ from the one that you get if you were
Speaker 2: to get that score directly from the bureau. And you know,
Speaker 2: most of these scores are on a scale that goes
Speaker 2: up to like eight fifty or nine hundred, and some
Speaker 2: folks are striving for a perfect credit score under each
Speaker 2: one of these models, and that's just a recipe for
Speaker 2: in futility, it's just completely unnecessary to strive for perfection. Basically,
Speaker 2: if your score is in the seven to forty plus
Speaker 2: range on any of these scales, that's good enough and
Speaker 2: it will basically qualify you for the best terms for
Speaker 2: different loans you might need access to. Just remember that
Speaker 2: seven forty or above is basically that a range where
Speaker 2: you're going to want to be in order to, yeah,
Speaker 2: get the best terms on all sorts of different lending
Speaker 2: products until they.
Speaker 1: Changed the rules on you. All right, let's go ahead
Speaker 1: and get started busting up some of these credit score myths.
Speaker 1: By the way, you remember the guys from MythBusters back
Speaker 1: in the day, Like that's sort of the inspiration for
Speaker 1: you know, for the title of this episode for the
Speaker 1: listeners out there.
Speaker 2: That was one of those first hit reality styles and
Speaker 2: TV shows.
Speaker 1: Yeah, one of my favorite ones I remember was they
Speaker 1: were like blasting cannonballs into a wall. And interestingly, this
Speaker 1: was like one of the episodes where they screwed up
Speaker 1: and like they're out out in the desert, like at
Speaker 1: a firing range or like like a bomb range basically,
Speaker 1: and like the cannon like tipped up, and so the
Speaker 1: cannon ball missed the wall and it went ricocheting off
Speaker 1: of like one of the hills and into a neighborhood.
Speaker 1: Oh my gosh, Yeah, super crazy. Nobody got hurt, but
Speaker 1: like I do remember like crashing into some of some
Speaker 1: dud's howls. I think it like went through a van,
Speaker 1: pretty serious, like and that's the day MythBusters got canceled, No,
Speaker 1: they did, Like that was right in the middle of
Speaker 1: a run of seasons where they were crushing It probably
Speaker 1: made for good TV rating, I think it did. Like
Speaker 1: that's the one I remember was the one where there
Speaker 1: was an errant cannonball. I could not imagine seeing that
Speaker 1: in real life. Anyway, Let's do some myth busting of
Speaker 1: our own, and the first one we wanted to share
Speaker 1: is that your credit score doesn't really matter all that much.
Speaker 1: And there's a good reason that we're starting with this
Speaker 1: one because we want to highlight the fact that your
Speaker 1: credit score is incredibly important. It affects so much more
Speaker 1: of your life than you realize. We just talked about
Speaker 1: the need for a credit score in modern society, but
Speaker 1: everything is going to cost you more if your credit
Speaker 1: score stinks. Lenders they're going to charge you what's called
Speaker 1: a risk premium if your score isn't great, but they
Speaker 1: also might decide not to lend to you at all
Speaker 1: if your score is in the dumps, and you might
Speaker 1: see to yourself, all right, that's fine, I'm not going
Speaker 1: to ever own a home. That's fine. Your credit score
Speaker 1: comes in play when you're renting a house too. Landlords
Speaker 1: they're gonna almost always run a credit check, and that
Speaker 1: is going to impact your ability to get the place
Speaker 1: that you want. You know, if I'm choosing between two tenants,
Speaker 1: they both seem great, they both make the same amount
Speaker 1: of money. I've got to base my decision on something,
Speaker 1: and the credit score can often the scales. A bad
Speaker 1: or non existent credit score could also impact your ability
Speaker 1: to get home internet or cable, or it might require
Speaker 1: you to put down a deposit. You might even pay
Speaker 1: more for auto insurance if your score is low. Having
Speaker 1: a good, solid credit score is not a trivial thing.
Speaker 2: Yeah, your credit score has an impact in so many
Speaker 2: areas of your life. And not only will a crappy
Speaker 2: credit score impact your ability to spend money, to take
Speaker 2: out a loan, to take on debt for something that
Speaker 2: you're looking to buy, which, let's be honest, maybe this
Speaker 2: is actually a blessing in disguise.
Speaker 1: If you potentially keep you from spending more money, yeah,
Speaker 1: then you can afford to well. It can also hamper
Speaker 1: your ability to earn money. And yeah, your.
Speaker 2: Credit history can have an impact when you apply for
Speaker 2: some jobs, like in particular ones in finance, or let's
Speaker 2: say you're moving up to management level, then there's a
Speaker 2: good chance your credit score comes into play here. Credit
Speaker 2: checks happen more often for these types of jobs where
Speaker 2: the stakes are higher, like when a security clearance is involved,
Speaker 2: or if you have access to a lot of money
Speaker 2: or sensitive information of your coworkers.
Speaker 1: I don't know this for a fact, but I got
Speaker 1: to feel in that, like bank tellers, if you've got
Speaker 1: a really, really really crappy credit score, like maybe you
Speaker 1: don't get that bank teller job where you're you know,
Speaker 1: dolling out the hundreds, right.
Speaker 2: Yeah, they might be like, sorry, go apply down the
Speaker 2: street at Target, and so yeah, you know, one study
Speaker 2: shows that twenty five percent of HR managers are actually
Speaker 2: going to check your credit history during the hiring process,
Speaker 2: even though they won't be able to see your actual
Speaker 2: score in most cases. But here's the deal. Your score
Speaker 2: is influenced by what's on your credit report. So if
Speaker 2: they can take a look at your credit report, they
Speaker 2: kind of, in theory, can deduce what your score is.
Speaker 2: And that crummy credit report with lots of errors and
Speaker 2: issues on it is going to potentially affect your ability
Speaker 2: to get the job that you want.
Speaker 1: That's a right, all right, We've got more credit myths
Speaker 1: that need to be shalat, and we'll get to all
Speaker 1: of those right after this break are back and we
Speaker 1: are busting up some of those different credit score myths. Yea,
Speaker 1: that you may have heard of, some you may not
Speaker 1: have heard of before. Let's get to our next one,
Speaker 1: which is checking your credit score hurts your credit score.
Speaker 1: I feel like this is one that's been around for
Speaker 1: a long time, and you know, like years ago, the
Speaker 1: credit scords were kind of like shrouded in secrecy. Like
Speaker 1: the bureaus and the banks and the lenders they knew
Speaker 1: what our credit score was, but we didn't. Sort of
Speaker 1: like credit scores, we're kind of like fight club, right,
Speaker 1: Like the first rule of credit score club is to
Speaker 1: not talk about your credit score, you know where you're
Speaker 1: fearing that just like an utterance might punish your score
Speaker 1: where you would you know, see it drop significantly.
Speaker 2: Yeah, it's like almost like the thought police would come
Speaker 2: after you. Like I thought about my credit card and
Speaker 2: I kind of wondered what my points score was total
Speaker 2: was And it's like, no, if you even asked that
Speaker 2: question your brain, they're gonna take your score down a
Speaker 2: not or two.
Speaker 1: It's almost like you're just better off just hoping for
Speaker 1: the best. But luckily that's no longer the case. We
Speaker 1: all have access to our scores pretty much at every
Speaker 1: turn these days.
Speaker 2: But I truly remember when that wasn't the case, because
Speaker 2: I I distinctly remember one of the first credit cards
Speaker 2: I ever got was at a bank that no longer
Speaker 2: exists called Washington Mutual that went.
Speaker 1: Wahmoo, it went down.
Speaker 2: You know, the great recession of the late to early
Speaker 2: two thousands. There two thousand and eight, and basically it
Speaker 2: was one of the first credit cards that made your
Speaker 2: credit score known to you on a monthly basis. They
Speaker 2: basically started the revolution of making credit scores widely accessive discovered. No,
Speaker 2: I think they came shortly after, and they've done a
Speaker 2: great job doing that. But WAMO was kind of that
Speaker 2: first bank where it was like listen, no annual fee
Speaker 2: credit card, but you get to know your credit scred
Speaker 2: every month. So for you know, money nerds like me
Speaker 2: who wanted to, Yeah, I wanted to, and there was
Speaker 2: no other place on the internet where where I don't
Speaker 2: think this was before credit karma existed. This is before
Speaker 2: the internet, not quite, but this is before electricity. I know,
Speaker 2: I'm definitely aging myself here, but it was kind of
Speaker 2: nice to have a credit score that would make that
Speaker 2: known to you. And you know, since then, obviously it's
Speaker 2: gotten so much easier to stay on top, and we'll
Speaker 2: talk about that a little bit later. But I remember
Speaker 2: in those days where it was like haring to find
Speaker 2: out what your credit score was, and you like you
Speaker 2: either had to find that one random credit card that
Speaker 2: would do it or just kind of hope and pray
Speaker 2: when you applied for a loan that your credit was
Speaker 2: in decent shape.
Speaker 1: Where you just had to know somebody on the inside.
Speaker 1: But it is important to know that there's a difference
Speaker 1: between a soft pole and your credit and a hard one.
Speaker 1: Hard polls will hurt your score, but soft ones won't.
Speaker 1: And so if you're getting a mortgage on a car loan,
Speaker 1: the lender is going to run your credit and that's
Speaker 1: considered a hard inquiry. That hard poll will ding your
Speaker 1: score just a little bit, maybe like ten points. Unfortunately,
Speaker 1: like that's just the price of admission. Though after all,
Speaker 1: you know the credit viureors they don't want to see
Speaker 1: you applying for new lines of credit every chance that
Speaker 1: you get. But on that note, some folks have come
Speaker 1: to believe that shopping around for a loan is going
Speaker 1: to hurt your score. And you know that's true, that
Speaker 1: you will see an initial hit to your score, but
Speaker 1: that doesn't mean that if you shop with multiple lenders
Speaker 1: that it will send your score sinking even lower with
Speaker 1: every single time that you get a quote. The beerers
Speaker 1: have it set up to where if you make multiple
Speaker 1: inquiries inside of a specific time window, and typically that's
Speaker 1: two weeks. Those like three or four or five credit
Speaker 1: polls they're just going to count as a single pole.
Speaker 1: So don't freak out, like, we still want you to
Speaker 1: get multiple quotes, because it's definitely the best way for
Speaker 1: you to get the lowest rate, but doing that within
Speaker 1: a timely manner that's really important and it's good for
Speaker 1: you to know that that will not hurt your credit score.
Speaker 2: Yeah, and that two week window is kind of the
Speaker 2: typical parameter used by some of the older credit scoring models.
Speaker 2: According to credit Karma, the newer scoring models that they
Speaker 2: treat multiple inquiries as a single poll as long as
Speaker 2: you make them, and they offer a much larger window
Speaker 2: of like forty five days, which is great, there's plenty
Speaker 2: of time to shot. But unfortunately, as the end user,
Speaker 2: because some things are still shrouded in secrecy in the
Speaker 2: credit score credit report arena, you don't know what scoring
Speaker 2: model the lender you're getting quotes t FRUM is using.
Speaker 2: You don't know if they're going to new school or
Speaker 2: old school, and so.
Speaker 1: It's like, are you using the vantage seven point six model?
Speaker 1: And they're going to look at you like, wait, what
Speaker 1: are you are?
Speaker 2: Using the Fiico nine point one, Like, which model are
Speaker 2: you using? And yeah, they're like, go back to law
Speaker 2: moogeel out of here, mane. I'll be like, I can't.
Speaker 2: They don't exist anymore. But yeah, basically, it's best to
Speaker 2: stick with the fourteen day window to be on the
Speaker 2: safe side. Just keep that as your rule of thumb
Speaker 2: when you're getting let's say, quotes for you know, a
Speaker 2: mortgage through a lender, make sure you get all those
Speaker 2: quotes in that fourteen days and you'll be fine. But
Speaker 2: on the other side of the spectrum, you're checking your
Speaker 2: own score via your credit card company or through a
Speaker 2: site like credit Karma, isn't going to have any impact
Speaker 2: on your score because that is what's known as a softball.
Speaker 1: It's different.
Speaker 2: And so yeah, you can check every single day if
Speaker 2: you want to, although that sounds like overkill and you
Speaker 2: might be a little bit too obsessed, But yeah, I
Speaker 2: think some people have that misunderstanding, Matt, that it's like,
Speaker 2: if I want to know what my credit score is,
Speaker 2: I'm gonna have to pay the price and it's going
Speaker 2: to hurt my credit score. And that is just not
Speaker 2: the case. You can check your credit score a whole lot,
Speaker 2: and it's not going to mess with you. It's only
Speaker 2: when those lenders are doing a hard pull in order
Speaker 2: to determine whether you have a level of credit worthiness
Speaker 2: where you can get that loan or not. That is
Speaker 2: when it's going to ding your score just a little bit.
Speaker 1: That is right next credit score, myth having debt will
Speaker 1: hurt your credit score. And what's really interesting about this
Speaker 1: one is that the opposite of this is kind of true.
Speaker 1: Some folks like they don't even call it a credit score,
Speaker 1: they call it like a debt score, which is actually
Speaker 1: it's slightly more accurate, even though it's kind of been
Speaker 1: used as a pejorative at times. But your score actually
Speaker 1: goes up if you have a variety of different loans
Speaker 1: and credit cards, as long as you're handling them all well.
Speaker 1: It pays to have a variety of debt, namely revolving debt,
Speaker 1: so that's like a credit card where you borrow money,
Speaker 1: you pay it back, and then you can borrow it again,
Speaker 1: and then installment debt like a mortgage, where you borrow
Speaker 1: that larger lump sum and then you slowly make payments
Speaker 1: on that over a longer period of time. So if
Speaker 1: You've just got say one credit card, but you don't
Speaker 1: have a student you don't have a mortgage. Even if
Speaker 1: you pay on time and in full every month, your
Speaker 1: score is not going to be able to go as
Speaker 1: high as someone who has a greater variety of debts.
Speaker 2: Yeah, but at the same time, you shouldn't necessarily go
Speaker 2: back and take out student loans for a degree you
Speaker 2: don't need and just to improve your credit score. That
Speaker 2: would be the wrong waiting to out be foolish.
Speaker 1: Yes. On that note.
Speaker 2: By the way, paying off one of your debts can
Speaker 2: actually hurt your credit score, which is just kind of interesting.
Speaker 2: Let's say you've had a car loan for a few
Speaker 2: years and you finally make that last payment and you
Speaker 2: are so pumped, right, You're like, I no longer have
Speaker 2: to pay money towards this car. I own it free
Speaker 2: and clear, and what a beautiful feeling that is.
Speaker 1: And I promise man Joel that I will never take
Speaker 1: out a car load again exactly, which we expect that
Speaker 1: in writing into our email inbox.
Speaker 2: But you know the one downside to that, and I
Speaker 2: don't want to make it sound like it's a huge downside,
Speaker 2: but your credit score might take like a ten to
Speaker 2: twenty point hit in the aftermath of that loan no
Speaker 2: longer being on your credit report, it could negatively impact
Speaker 2: your score. And it sounds crazy, but it is actually true.
Speaker 2: And fortunately that ding typically doesn't last all that long.
Speaker 2: And this is definitely not a reason to keep debt
Speaker 2: lingering around in your life past the point that you
Speaker 2: need to. Just like having a student loan might actually
Speaker 2: help your credit score a little bit, like you don't
Speaker 2: want to go get one just because it's going to
Speaker 2: help your credit score. Well, just because paying off that
Speaker 2: car loan could negatively impact your score for a small
Speaker 2: period of time doesn't mean you don't want to pay
Speaker 2: it off. But it is smart to be aware because
Speaker 2: you know, especially if you need to use that tip
Speaker 2: top credit score to get a loan for a big
Speaker 2: future purchase in the near future, you want to be
Speaker 2: careful about the timing of when you pay off, yeah,
Speaker 2: one of those big loans, because yeah, if you're at
Speaker 2: seven point fifty you pay that car loan off, you're
Speaker 2: at seven thirty and you're applying for a mortgage loan,
Speaker 2: that could impact, yeah, the rate that you get on
Speaker 2: something you're going to be paying on for thirty years, which.
Speaker 1: Sounds unlikely, I think, maybe to a lot of folks
Speaker 1: as they're sitting there, but like, no, that's kind of
Speaker 1: how money works, right. You get a big bonus at work,
Speaker 1: and you're like, you know what, I'm gonna go ahead
Speaker 1: and pay off my car loan a little bit early.
Speaker 1: I've got six months left. Let's go ahead and knock
Speaker 1: that out completely. And we've got enough money now to
Speaker 1: put a down payment on the house. Boomshot, Like we're
Speaker 1: crushing it. And then you find out that, oh, I'm sorry,
Speaker 1: so you don't qualify for the top tier rates a
Speaker 1: really nice rate, or I'm sorry, mam, you actually are
Speaker 1: going to oh a little bit more on the fees
Speaker 1: associated with your loan. It's just something to keep in mind.
Speaker 1: Just like Joel said, it actually has a higher chance
Speaker 1: of happening than you think. And so another credit score
Speaker 1: myth that we wanted to mention carrying a balance will
Speaker 1: help boost my score. This one is sort of like
Speaker 1: the flip side of the coin from what we were
Speaker 1: just touching on, and a lot of folks have bought
Speaker 1: into this myth. You know, they're thinking having a nice
Speaker 1: mix of debt, that's helping out your score. So maybe
Speaker 1: not paying your credit card balance off, I should did
Speaker 1: the same thing, right.
Speaker 2: It's like keeping that debt around to enhance your score.
Speaker 1: Yeah, that's dumb. No, your monthly statement balance, it still
Speaker 1: gets reported to the credit bureau. But that doesn't mean
Speaker 1: that you should carry a balance and pay interest to
Speaker 1: the credit card companies instead. There's no need to neglect
Speaker 1: to pay it off. It's not going to help you.
Speaker 1: It's only going to cost you money in interest.
Speaker 2: Yeah, but people just assume, well, let me let that
Speaker 2: balance linger, I'll pay a little bit of interest, but
Speaker 2: it's going to help my credit score, And that's just
Speaker 2: not true.
Speaker 1: I think it's just oftentimes too just folks just fooling themselves. Yeah, right,
Speaker 1: because like maybe, like deep down you know that that's
Speaker 1: probably not true, but you thinking, no, you know, like
Speaker 1: there's a chance maybe that might be the case, but no,
Speaker 1: like do what you need to do to make sure
Speaker 1: that you're paying your bills.
Speaker 2: This is definitely one that people like to trick themselves on,
Speaker 2: or at least they get tricked by. They assume that, yeah,
Speaker 2: if I just don't pay it off in full, I
Speaker 2: might pay a little interest, But it's going to raise
Speaker 2: my score, and so it's all going to wash out
Speaker 2: in the end. I need to work on my credit score,
Speaker 2: and so this is a way to do it, but
Speaker 2: in reality it has no bearing and actually it just
Speaker 2: hurts your personal finances if you do that. All, Right,
Speaker 2: next credit score. Myth we need to bust, Matt. Is
Speaker 2: your banking effects your credit score. Well that's definitely not true, right, because, yeah,
Speaker 2: how much money you have in checkings or savings, it
Speaker 2: doesn't have any impact whatsoever on your credit score. Doesn't
Speaker 2: matter if you have two hundred grand in your savings account, like,
Speaker 2: that doesn't matter to the credit score people. They don't
Speaker 2: look at that. They don't care, it's right. So, yeah,
Speaker 2: it's very possible to have a great credit score but
Speaker 2: be completely broke with nothing in the bank. Even however,
Speaker 2: that doesn't mean, right, the cash on hand doesn't matter,
Speaker 2: and lenders will look at your total assets to determine
Speaker 2: if they're going to approve you for any new credit,
Speaker 2: But it doesn't have any bearing on your credit score.
Speaker 1: Right.
Speaker 2: The amount of money that you have just chilling, And
Speaker 2: so it doesn't matter where you do banking either, right.
Speaker 2: Some people assume that the bank they do business with
Speaker 2: is reporting low account balances or lets the credit bureau
Speaker 2: know about an overdraft fee that gets incurred, And that's
Speaker 2: just not true. That stuff doesn't matter, doesn't factor into
Speaker 2: your credit score, and it's not getting reported in any
Speaker 2: way to the credit bureaus.
Speaker 1: So just know that.
Speaker 2: Yeah, the way you do banking, who you bank with,
Speaker 2: and some of those minor infractions that you might run
Speaker 2: a fout of, they're not going to impact your score
Speaker 2: in any way.
Speaker 1: Yeah, the credit bureaus, they don't care what you do
Speaker 1: with your money. Like, it's not about your money. It's
Speaker 1: about other people's money, right, It's about the money that
Speaker 1: you've borrowed and whether or not you're paying that back,
Speaker 1: how you're handling that money. They don't care what you
Speaker 1: do with your money. Yeah, exactly, that's up to you.
Speaker 1: That's you and your business, Like are you a good borrower?
Speaker 1: Not are you a good saber? Exactly. Yeah. Another myth
Speaker 1: we wanted to get to. There's this one where you
Speaker 1: should hire someone to help fix your banged up credit score.
Speaker 1: We completely disagree with this one. There's nothing that someone
Speaker 1: on the internet claiming to help your score can do
Speaker 1: that you can't do for yourself.
Speaker 2: Oh man, there's so many bold on anxious claims on
Speaker 2: the internet too, Matt.
Speaker 1: Yeah, well yeah, you got to ignore all the most
Speaker 1: of all those false head lines. This is just a
Speaker 1: waste of money, though, and oftentimes it's an all out
Speaker 1: con or a scam. Oftentimes they're going to try to
Speaker 1: charge you an upfront fee and then they end up
Speaker 1: not being able to deliver on the promises, which often
Speaker 1: includes claiming to be able to remove that negative information
Speaker 1: from your credit report, even if that information is accurate.
Speaker 1: They cannot do that. That is not true. So avoid
Speaker 1: anyone who says that they'll fix your score if you
Speaker 1: just pay them some money.
Speaker 2: And I think this is another just too good to
Speaker 2: be true sort of thing right where people are like, oh, yes,
Speaker 2: if I don't pay my credit card balance, my score
Speaker 2: will magically go up. Or wait, if I pay this person,
Speaker 2: you know, five hundred bucks a thousand bucks, my problem
Speaker 2: of a crummy credit score will quickly dissipate. It's going
Speaker 2: to be gone. But it's just like a good rich
Speaker 2: quick scheme. Like the promises sound appealing, and when you're
Speaker 2: in that mind, you want things to get fixed quickly.
Speaker 2: Anyone things will be easy, yes, but in reality that's
Speaker 2: not how it works. And basically you're always swindled out
Speaker 2: of your money because there is no way to just
Speaker 2: change your credit score overnight.
Speaker 1: Yeah that's right, just like you can't just take a
Speaker 1: pill and magically get fit. Like it takes hard work,
Speaker 1: it takes discipline, and really wish you could though personal responsibility.
Speaker 1: But we'll talk more about how to raise your credit
Speaker 1: score and how you can do it without anyone else's help,
Speaker 1: and we'll get to all of that right after this break, Right, Matt,
Speaker 1: you got to.
Speaker 2: Talk about how people can heal their own credit scores
Speaker 2: without paying big bucks to scam artists on the internet.
Speaker 2: We'll get to that in just a second. I wanted
Speaker 2: to cover just one more credit score myth, and maybe
Speaker 2: it isn't even a myth anymore, but you know, a
Speaker 2: question we've been asked on the show multiple times has
Speaker 2: to do with the impact on your credit score by
Speaker 2: closing a credit card that you're not using. This is
Speaker 2: something that there's still just a ton of confusion in
Speaker 2: that arena over and this is important to cover because
Speaker 2: your credit score, it's composed of a number of factors,
Speaker 2: and really we should we should talk about that because
Speaker 2: you might be hurting yourself on two of the main
Speaker 2: fronts if you cancel an older card. So some people
Speaker 2: I get the impulse they want to cancel a card
Speaker 2: because they just paid off and then balance their credit
Speaker 2: card debt free. And what they want to do is
Speaker 2: get it out of their life.
Speaker 1: Or maybe they're like Marie condoing their life and they're just, yeah,
Speaker 1: I want just to simplify, simplify, and we're cleaning house, close, close, close.
Speaker 2: And then find their credit score takes a beating, right,
Speaker 2: And that's because, first of all, the age of your
Speaker 2: credit matters, So the longer you've had the card, the
Speaker 2: more it's helping your score. And yeah, if you cancel it,
Speaker 2: that's gonna that's gonna impact you negatively. Also, credit utilization
Speaker 2: is an important term that you've got to be familiar with. Basically,
Speaker 2: the bureaus want you to have a lot of available
Speaker 2: credit but to be using very very little of it.
Speaker 2: Basically it shows restraint, which makes you look like a
Speaker 2: better borrower. It's like, oh, look at Jack over there,
Speaker 2: or look at Jill over there. It's like they have
Speaker 2: just so much credit access but they use so very
Speaker 2: little of it, they must be a stupe borrower who
Speaker 2: doesn't get in over their head. So yeah, instead of
Speaker 2: canceling a card, we would suggest keeping it open even
Speaker 2: once it's paid off in full, which is what we suggest,
Speaker 2: Like we don't want you to have any credit card
Speaker 2: debt ever, but yeah, use it every couple of months,
Speaker 2: continue to pay it off in full and on time,
Speaker 2: and that card is going to keep helping you out
Speaker 2: even if you found maybe better rewards and perks with
Speaker 2: another card. Or you're like, listen, I'm just out of
Speaker 2: credit card debt altogether, and I don't even want to
Speaker 2: be bothered by by this thing anymore. Still, you can
Speaker 2: still cut it up, or you can still stick it
Speaker 2: in the freezer, whatever you need to do. But what
Speaker 2: you don't want to do is call the credit card
Speaker 2: company and cancel that card altogether.
Speaker 1: That's right. And you mentioned too, using a card like
Speaker 1: maybe every couple months to kind of keep that line active.
Speaker 1: I'll mention that I've got at least three cards that
Speaker 1: I never use. They are cards that I have laid
Speaker 1: to rest, so to speak, and I only use them
Speaker 1: one like literally I think once a year now, and
Speaker 1: that at least in my case, you know, your mileage
Speaker 1: may vary. In my case, I've been able to keep
Speaker 1: those accounts open by literally only using those cards once
Speaker 1: a year. And that is a City card, a Discover card,
Speaker 1: and a Capital One card. H and so it may
Speaker 1: not even take you using it every couple of months.
Speaker 1: But it also too, I mean, it kind of depends
Speaker 1: on how many lines of credit you have, right So
Speaker 1: if you've got I don't know, I mean, if you've
Speaker 1: got twelve credit cards, if there's one that's you just
Speaker 1: really want to get rid of, maybe specifically if it
Speaker 1: has especially if it has an annual fee and you're
Speaker 1: not getting any value from that card, that account would
Speaker 1: be a great candidate to close. First of all, you've
Speaker 1: got multiple lines of credit already, and so it's not
Speaker 1: like you're going to be significantly reducing your card utilization.
Speaker 1: But again, the fact that you're paying ninety potentially ninety
Speaker 1: five bucks a year, whatever the annual fee is, you
Speaker 1: need to make sure that you're actually getting that value
Speaker 1: from that card if you're going to be paying that exactly.
Speaker 2: I think that is one of the only reasons I
Speaker 2: think I have an article up on the site about
Speaker 2: when and how you should go about canceling a credit card.
Speaker 2: Where we'll put that in the show notes. But I think, Matt,
Speaker 2: the one other thing you could do if you have
Speaker 2: a credit card with an annual fee is you can
Speaker 2: call your credit card company up and say, hey, can
Speaker 2: you actually transfer me to another credit card yeah, that
Speaker 2: has no annual fee with the same issuer. And oftentimes
Speaker 2: they'll do that, and so it retains that credit history,
Speaker 2: but you still get rid of that annual fee. That's
Speaker 2: kind of pesky, exactly.
Speaker 1: Yeah, they're happy that you haven't completely lost your allegiance
Speaker 1: to them as a company, and you are happy because
Speaker 1: you're not having to fork over that money for or
Speaker 1: no value in return. And so you know, we also
Speaker 1: want to make sure that you don't feel the need
Speaker 1: to obsess over your credit score. You touched on this earlier, Joel,
Speaker 1: but like it's an important part of your personal finances.
Speaker 1: It's worth keeping tabs on. But it is possible to
Speaker 1: be too attentive to your credit score, and so we
Speaker 1: want you, if this is you, we want you to
Speaker 1: limit the amount of time that you're giving it, like
Speaker 1: maybe just check it once a quarter in order to know,
Speaker 1: you know, what your score is looking like. You can
Speaker 1: even just set a calendar reminder for yourself. It is
Speaker 1: important because a dinged credit score can tip you off
Speaker 1: to something that you might not be aware of, that
Speaker 1: might have been added to your credit report, maybe even
Speaker 1: by mistake. Discovers credit scorecard credit Karma, they're two of
Speaker 1: our favorite sites for checking your credit. They'll even give
Speaker 1: you a peek under the hood of your credit score
Speaker 1: to see what might be causing the problem. You'll find
Speaker 1: some helpful education tools there as well, and studies have
Speaker 1: shown that just knowing your score is an important step
Speaker 1: towards improving it, so that awareness it goes a long
Speaker 1: way towards doing the work to make it better. But
Speaker 1: we don't want it to be something that you're checking
Speaker 1: every single morning, like before you check your email. Like
Speaker 1: it doesn't need to be a part of your routine. Yes, no,
Speaker 1: I'll completely agree.
Speaker 2: I think that the diagnostic feature though of those websites
Speaker 2: is really helpful because if you're saying, Okay, I see
Speaker 2: what my credit score is, it's not in the best spot.
Speaker 2: I really want to raise it to that seven forty
Speaker 2: plus level that Matt and Joel we're talking about how
Speaker 2: do I get there, Well, you'll see the areas that
Speaker 2: are holding you back. And it might be length of
Speaker 2: credit history that might be one of the biggest things.
Speaker 2: Or it might be on time payments, which if you've
Speaker 2: had a few of those, those are going to hurt
Speaker 2: your creditscore in a big way. Those will over time
Speaker 2: fall off. But there are all these little things that
Speaker 2: you can see as you're looking at that diagnostic toolkit
Speaker 2: on those sites where you can know where to focus
Speaker 2: your efforts on how to make your credit score better.
Speaker 2: And I think, yeah, you don't pay anybody money right
Speaker 2: to do something that they can't actually do. But when
Speaker 2: you look at that and you figure out what's holding
Speaker 2: you back, then you can address it with how you
Speaker 2: handle your credit in the future totally.
Speaker 1: And here's the thing.
Speaker 2: If you do check your credit score and you find
Speaker 2: out that it's taken a hit, well, then make sure
Speaker 2: to pull your credit report from the site Annual Credit
Speaker 2: report dot com. And I kind of alluded to this
Speaker 2: earlier math that the credit report and the score are
Speaker 2: two different things. The report kind of list out all
Speaker 2: the things that are happening with your credit and the
Speaker 2: score gives you a numerical reading of what you're you know,
Speaker 2: what's basically on that report, and so if there are
Speaker 2: any errors, you're going to want to make sure to
Speaker 2: file a dispute directly with the with the credit bureau
Speaker 2: where that issue lies. And so, yeah, something like one
Speaker 2: in four credit reports contains an error. So there's no
Speaker 2: need to stress if your report has something fishy on it.
Speaker 2: It's not like you are an anomaly.
Speaker 1: A lot of.
Speaker 2: People have this issue. Sadly, the bureaus they don't do
Speaker 2: an amazing job at responding to those disputes. Their track
Speaker 2: record has only gotten worse over the past couple of years.
Speaker 2: And yeah, here we would say that's not right. The
Speaker 2: credit bureaus need to do a better job. And it
Speaker 2: is borderline infuriating that they have the powers that they
Speaker 2: have to amass all the data on us that they
Speaker 2: do and then to pack and sell our credit scores
Speaker 2: without actually having to verify that the information is accurate.
Speaker 2: But here's the thing, you've got to beat the squeaky
Speaker 2: wheel in order to get that error fixed, because the
Speaker 2: credit bureaus they're big behemoths. And yeah, you've got to
Speaker 2: be like that little David beating up Egliath in order
Speaker 2: to get change actually to happen to make sure your
Speaker 2: credit score reflects accurately the truth about what's happening with
Speaker 2: your credit.
Speaker 1: That's right, And by the way, real quick Annual Credit
Speaker 1: Report dot Com you can still go there, Like they
Speaker 1: should call it weekly credit report dot Com because like
Speaker 1: it was the middle of the pandemic when they switched
Speaker 1: to you being able to get all three reports for
Speaker 1: free every single week.
Speaker 2: But I hope that becomes normal forever.
Speaker 1: Well, things haven't changed yet, but it's set to go
Speaker 1: back in the middle of April to reset, and so
Speaker 1: those free weekly reports are running out. So if that's
Speaker 1: something you haven't done yet, now would be a great
Speaker 1: time to go ahead and get get in there, get
Speaker 1: all three before the usual rules come back to play.
Speaker 1: But but, like you're saying, jel, like we're not big
Speaker 1: fans of the credit report the scoring system as it stands,
Speaker 1: largely because of the depensity for the errors that you're
Speaker 1: just talking about, and the reality that the credit Burea
Speaker 1: is that like they could care less about the errors
Speaker 1: themselves or helping you to resolve them, because again, you
Speaker 1: are not the customer. They are selling your data to
Speaker 1: their actual customers. You are the data, yep. But those
Speaker 1: errors they can prevent folks from getting loans, you know,
Speaker 1: even sometimes getting jobs. But credit scores are a reality
Speaker 1: that we all have to deal with. Not paying attention
Speaker 1: to your credit score or pretending that it doesn't exist,
Speaker 1: that's going to eventually have a negative impact on your life.
Speaker 1: You're not going to be able to qualify for a
Speaker 1: home loan that you really want, or you know, maybe
Speaker 1: you won't qualify for the best interest rate at least
Speaker 1: increasing the monthly cost of that mortgage. You can hate
Speaker 1: the game, but it is still smart to play it, Like,
Speaker 1: even when the rules of the game are changing, like
Speaker 1: even by now pay later, that is starting to become
Speaker 1: something that is getting incorporated into credit scores. It's something
Speaker 1: that we all need to be aware of. We need
Speaker 1: to know how to play the games, even if we're
Speaker 1: not the biggest fan of the game.
Speaker 2: Yeah, so let's give a few final tips, just kind of.
Speaker 1: Maybe to sum it up.
Speaker 2: Yeah, Like, well, how are just a few ways if
Speaker 2: we were going to give you just three or four
Speaker 2: suggestions on how to improve your credit score the most quickly, right,
Speaker 2: what are your big takeaways for this st effort? Right,
Speaker 2: I would say that kind of thing. One thing, of course,
Speaker 2: is to pay your bills on time, right, And if
Speaker 2: you don't do that, that is going to dig your
Speaker 2: credit more than anything else. Late pays or not paying
Speaker 2: are going to be the worst reflection on you as
Speaker 2: a borrower, and they're going to crush your score. And
Speaker 2: a single missed payment, Matt can lop one hundred points
Speaker 2: off of somebody's credit score. So yeah, use debt smartly,
Speaker 2: pay off your debts as you've agreed to. Basically, you
Speaker 2: don't want to get in over your head. Don't kid
Speaker 2: yourself into thinking that taking on a big car loan
Speaker 2: is smart just because it's going to give your score
Speaker 2: a bump. That's a bad move. Intelligently using a few
Speaker 2: different credit cards each month to pay for your needs
Speaker 2: and then paying those balances in full is helpful, and
Speaker 2: then don't close those accounts. So, yeah, you want access
Speaker 2: to these varied kinds of credit, but only credit that
Speaker 2: you can handle, only credit that you can use wisely,
Speaker 2: And yeah, credit cards are a portion of those. Using
Speaker 2: them intelligently is going to help your score. Having seasoned
Speaker 2: credit in your possession is a good thing too, right,
Speaker 2: Like we said, the longer you've had some of those
Speaker 2: credit products around in your life, especially some of those
Speaker 2: credit cards that you've had for a decade plus, it's
Speaker 2: like you don't want to get rid of that because
Speaker 2: that is having a helpful impact on your credit score.
Speaker 2: And then Matt, for somebody out there who says, I've
Speaker 2: got a really bad score and you know, I can't
Speaker 2: even get a credit card right now, Well, if your
Speaker 2: credit score is in really poor shape, we would recommend
Speaker 2: a site like self dot, Inc. And that's our favorite
Speaker 2: place for people to turn. They have these credit builder
Speaker 2: accounts and they're a great way to quickly build up
Speaker 2: your score through a credit builder alone. So that's one
Speaker 2: of the first things we would recommend. That's one of
Speaker 2: the best places to go to be able to quickly
Speaker 2: start jumpstarting your score. But yeah, I think we actually
Speaker 2: did an episode specifically for people who have a rough
Speaker 2: or busted up credit score, right episode one thirteen.
Speaker 1: If you want to dig back into the archives and listen.
Speaker 2: To that one, Okay, yeah, we'll link that in the
Speaker 2: show notes as well. But yeah, there are different tactics
Speaker 2: that you're going to want to take if your credit
Speaker 2: score is already just completely in the dumps. But again,
Speaker 2: this is one of those things that you can do
Speaker 2: and you do not need the help of some faux
Speaker 2: Internet professional to get you to where you need to be.
Speaker 1: That's right. And by the way, if you have kids
Speaker 1: and you want them to reach adulthood and have a
Speaker 1: great credit score, it's actually pretty easy to get them
Speaker 1: started off on the right foot. One of the best
Speaker 1: ways to accomplish this is to make them an authorized
Speaker 1: user on one of your credit card accounts, but not
Speaker 1: give them an actual card. And that's the trick. You
Speaker 1: don't want your eight year older I guys running around
Speaker 1: with a credit card. But this assumes that you have
Speaker 1: and you continue to have and maintain good credit. But
Speaker 1: the credit bureaus, they're going to see your child with
Speaker 1: access to that good credit you know themselves, and it will,
Speaker 1: by association, inflate their credit worthiness. It's a nice little,
Speaker 1: nice little tit nice little hack. We've talked about this
Speaker 1: maybe on the show. Was it like a year ago,
Speaker 1: maybe year and a half ago, And I haven't checked
Speaker 1: my kid's credit But at that point in time, I
Speaker 1: added my kids to one of my cards. They're still
Speaker 1: on that card. I still use that card. And pay
Speaker 1: it off on time in full. Some guessing they've got
Speaker 1: pretty stellar credit.
Speaker 2: I think they say their prayers every night, like please Lord,
Speaker 2: lynd Daddy pay his credit card bill so he doesn't
Speaker 2: hurt my credit now. But no, you're right, like that
Speaker 2: is one of those things that you can do for
Speaker 2: your kids, and it can be really helpful for It's
Speaker 2: like a nice little service you can starting them off
Speaker 2: on the right foot a little bit of credit. Yeah,
Speaker 2: all right, I want to ask you one question here
Speaker 2: at the end, because I think right now credit scores
Speaker 2: still matter a great deal in our society, right and
Speaker 2: it's one of the things that we're saying that you
Speaker 2: kind of can't get around. You have to pay attention
Speaker 2: to it. It's part of the game, the personal finance
Speaker 2: game that we all play, and so you just have
Speaker 2: to be ready to suit up and do your best.
Speaker 2: But yeah, do you think that credit scores in their
Speaker 2: current iteration are think?
Speaker 1: Okay, yeah, like you're diving into the fiction now, Yeah,
Speaker 1: the possibility, I only deal in fact, ten years in
Speaker 1: the future, will credit scores play as big of an
Speaker 1: impact in our personal finance lives as they do today?
Speaker 1: I mean they do now. I think as different apps
Speaker 1: come online, like basically all I feel like all the
Speaker 1: different finance apps are in an arms race right to
Speaker 1: get as many customers as possible. Whether that's initially an
Speaker 1: app that allows you to transfer money to your friends
Speaker 1: very easily because they have that app as well, and
Speaker 1: then all of a sudden, guess what, Oh, you can
Speaker 1: buy a bitcoin with that app. So all of a sudden,
Speaker 1: now you can transfer money, you can save in that app,
Speaker 1: and you can also quote unquote invest. The next thing
Speaker 1: that a lot of these apps and money management platforms
Speaker 1: I think are allowing their customers to do is then
Speaker 1: borrow money, which guess what if they know all of
Speaker 1: your transactions, then they have your history. I could see
Speaker 1: them not necessarily needing to go to the credit bureers
Speaker 1: and get an actual credit report or credit score from them.
Speaker 1: So it depends, I guess, on what the future of
Speaker 1: the different finance apps look like. That is one path forward,
Speaker 1: but I'm not going to say that that's where we're going.
Speaker 1: I'm just kind of I'm laying out the future like
Speaker 1: this could happen or this could happen, but I'm not
Speaker 1: going to necessarily say that that will happen. But do
Speaker 1: you disagree, like you seem less optimistic about the future
Speaker 1: of credit school.
Speaker 2: I think people are so fed up and frustrated with
Speaker 2: the credit bureaus. Something's going to give at some point,
Speaker 2: and I think we've already seen alternative.
Speaker 1: Are they fed up or do people just not care? Right? Like,
Speaker 1: like when there's a data breach and fifty million people
Speaker 1: have have their's local security just floating around out there
Speaker 1: in the dark, one hundred and fifty minions, one hundred
Speaker 1: and fifty like, people don't care. They still have the
Speaker 1: same passwords that they've used for five years. You included
Speaker 1: I know some of your passwords, and I'm always like,
Speaker 1: I'm pretty sure I can guess you.
Speaker 2: Know, I'm trying to break into my accounts.
Speaker 1: Well, your new Netflix passwords is okay. Well, I'll say this.
Speaker 2: I think that you know, they get the highest complaints
Speaker 2: of when it comes to scam attempts.
Speaker 1: And that is when it comes to getting shut down.
Speaker 2: And I think that some folks in the government have
Speaker 2: already floated the idea that maybe a centralized control of
Speaker 2: credit scores could take place, some sort of government run system.
Speaker 2: I don't know if that would be better because the
Speaker 2: somewhat not really privatized system we have right now isn't
Speaker 2: working very well either. But I could see just companies
Speaker 2: making decisions based on some of your other public profiles,
Speaker 2: so how you act on social media, and maybe oh
Speaker 2: my gosh, joined it. I know, but I think it's
Speaker 2: already happening to a certain extent. I'm curious to see
Speaker 2: what happens over the next ten years.
Speaker 1: But it's interesting. So you see it maybe going towards
Speaker 1: a more centralized, you know, mechanism, either more centralized or
Speaker 1: completely decentralized. I see it being more decentralized with these
Speaker 1: independent different companies who are setting up shops with either
Speaker 1: within an app or just with within a site, but I.
Speaker 2: Think more likely, and they start to communicate to each
Speaker 2: other when they need like some respective information to kind
Speaker 2: of fill out all the dots on. I could see
Speaker 2: that an application that you've you know, that you've.
Speaker 1: Submitted that definitely feels less big brother, you know, I mean,
Speaker 1: come on, the future is on the blockchain anyway, So
Speaker 1: that's that's the direction we're going. But that's gonna be
Speaker 1: it for credit scores, do Let's talk about this beer
Speaker 1: for this episode This was Hello World by Spyglass Brewing Company,
Speaker 1: sent to us by Gary. What were your thoughts on
Speaker 1: this beer? All?
Speaker 2: Right, so I think this was maybe even a touch
Speaker 2: better than Monday's beer. Oh really, it's hard to say that.
Speaker 1: But I thought you were going to say that this
Speaker 1: one wasn't as good because I thought this one was
Speaker 1: a touch sweeter. Okay, it was a little bit sweeter.
Speaker 1: It was like a little more juicy, a little more yeah,
Speaker 1: Like I don't know, just juicy is the.
Speaker 2: Yeah, I think you're right on my head, But I
Speaker 2: don't know.
Speaker 1: Man.
Speaker 2: I really enjoyed both these beers. They were both really
Speaker 2: really different examples of hazy IPAs having different hot profiles.
Speaker 2: It is just amazing the way that different hot varieties
Speaker 2: mixed together can create just a completely different profile. And
Speaker 2: it always surprises me where I'm like, wait, no fruit's
Speaker 2: used in this or wait a second. It was just
Speaker 2: like two different hops and that completely changed like the
Speaker 2: flavor profile. But hops are just so versatile, and so
Speaker 2: this beer just kind of showcased a different kind of
Speaker 2: hop that had a distinctly different flavor profile. But Gary
Speaker 2: just sent in us some slammer beers.
Speaker 1: This can Yeah, absolutely, which, by the way, so you saying, oh,
Speaker 1: there's no fruit in this beer makes me takes me
Speaker 1: back to one of the beers that we said that on,
Speaker 1: which was Woodland Pursuit that was a humble Forger beer,
Speaker 1: And it turns out I did look it up and
Speaker 1: in fact, it did have fruit in it on the can.
Speaker 1: They don't want to advertise it. Yeah, on the can,
Speaker 1: it didn't say anything about fruit anywhere on the can.
Speaker 1: But when you go to the website or you know,
Speaker 1: go to the brewery, it actually was a fruited I
Speaker 1: believe it was a fruited IPA because Woodland Pursuit it
Speaker 1: was crazy off the chain fruit and you and I
Speaker 1: were just like racking our brains as possible. Were they
Speaker 1: able to pull that kind of fruit flavor out of
Speaker 1: this beer without any actual fruit and only with the hops.
Speaker 1: I don't think that's what's going on here. This tastes
Speaker 1: like a classic hazy double IPA And I wanted to
Speaker 1: point out to the label for this one. I love
Speaker 1: it's a black background green MSDOS print. It reminds me
Speaker 1: a lot of one of our favorite local brewers here,
Speaker 1: Halfway Crooks for sure, or they're kind of going with
Speaker 1: like that. I don't know what do you call it,
Speaker 1: like nerd sheet or something like that, But Halfway Crooks
Speaker 1: they've combined like the old world with like sheep and
Speaker 1: the European tradition of pilsners and loggers. Sounds weird, but
Speaker 1: they do it well and combined it with the nerdery
Speaker 1: of ms dos in the early computer days, which funny enough.
Speaker 1: I mean, that's just that's that's the perfect blend of
Speaker 1: the two dudes that started that brewery. Yeah, because one
Speaker 1: of them is from Belgium, Dan, and the other owner
Speaker 1: is Sean. He's from Georgia Tech. It's another one of
Speaker 1: the reasons why we love that brewery so much. So
Speaker 1: if you haven't, just right now just stearch Halfway Crooks
Speaker 1: and just check out their merch. We think it is
Speaker 1: just the dopest stuff around. And I feel bad because
Speaker 1: we should be talking about Spyglass that we're talking about
Speaker 1: one of our family. Similar aesthetic and similar aesthetics on
Speaker 1: this beer you'll see in the picture of this label.
Speaker 1: Why we're talking about you compare something that you've just
Speaker 1: experienced to something that you love and consider to be excellent.
Speaker 1: I feel like that is the highest compliment. It's a
Speaker 1: good sign. So Spyglass Rocks, thank.
Speaker 2: You Gary and company percenting this one our way. We
Speaker 2: appreciate it, and Matt, that's going to do it for
Speaker 2: this episode. For folks who want the show notes links
Speaker 2: to some of the things that we mentioned on this episode,
Speaker 2: just go to our website at howtomoney dot com.
Speaker 1: That's right, So that's gonna be it until next time.
Speaker 1: Best Friends Out, Best Friends Out,