Speaker 1: Welcome to How the Money. I'm Joel and I'm Matt,
Speaker 1: and today we're talking about how to rebuild a rough
Speaker 1: credit score. Yeah, Joel, you know, having a good credit score,
Speaker 1: it is so important these days. We're gonna talk about
Speaker 1: why it is so important, and of course, how to
Speaker 1: rebuild it if your scores in the gutter a little bit.
Speaker 1: But speaking of credit score, let's talk about Equifax, because
Speaker 1: did you did you look it up and see if
Speaker 1: you were one of the people affected. Yes, I did, Matt.
Speaker 1: And by the way, that free money, right, yeah, exactly.
Speaker 1: So it seems like based on the numbers, almost every
Speaker 1: adult American was affected. Half of the adults in the
Speaker 1: United States, like half of anybody that had a Social
Speaker 1: Security number was affected. So it's a big problem, right,
Speaker 1: And so we talked a while about freezing your credit
Speaker 1: and how important that is, and especially in light of
Speaker 1: essentially all of our information with the Capital One breach,
Speaker 1: with the Equifax breach, breaches everywhere, and I think there's
Speaker 1: just breach fatigue essentially exactly. And that was episode thirty eight,
Speaker 1: by the way, that we talked about freezing your credit,
Speaker 1: and that is incredibly important because that is the only
Speaker 1: way to actually prevent fraudulent accounts for being opened in
Speaker 1: your name. Yeah, and now, because of the Equifax breach
Speaker 1: and laws that were put into place, credit freeze is
Speaker 1: free for us. So that's great. So everyone should be
Speaker 1: freezing their credit. But now at least you know what
Speaker 1: we can get recompense. We can get a little bit
Speaker 1: of payout from the Equifax breach for our information just
Speaker 1: being leaked out there, and so people need to know
Speaker 1: about this. The website where you can go to make
Speaker 1: a claim is Equifax Breach Settlement dot com. We'll link
Speaker 1: to it in the show notes as well. Essentially, they
Speaker 1: allow you to choose from free credit monitoring or up
Speaker 1: to a hundred and twenty five dollars, but there's also
Speaker 1: a cap on the overall amount that Equifax is going
Speaker 1: to pay under the settlement that they reached with the FTC. Yeah.
Speaker 1: Well it was seven million dollar payomp, but only a
Speaker 1: small percentage of that is actually going to us as
Speaker 1: those affected. So basically the more people that sign up
Speaker 1: and make that claim, well the payout decreases per person. Yeah,
Speaker 1: so it actually being is is actually there's a slim
Speaker 1: chance of that happening. Yeah, it's unlikely for sure. But
Speaker 1: and the other thing is that people instead of choosing
Speaker 1: the bucks, you can choose four years of free credit monitoring.
Speaker 1: And I've read some stories from papers around the country
Speaker 1: and they're basically pushing people in that direction. They're saying,
Speaker 1: like the Washington Post is like, here's why you need
Speaker 1: to choose the free credit monitoring over the money, and
Speaker 1: I have to respectfully disagree. I think if you were
Speaker 1: affected in any way by the Equifax breach, you should
Speaker 1: be applying for the cash payment, not the credit monitoring.
Speaker 1: And that's because if you just basically assent to the
Speaker 1: fact that you have credit monitoring, that you have some
Speaker 1: sort of credit monitoring, you can take the cash instead.
Speaker 1: And there are awesome free options for you when it
Speaker 1: comes to credit monitoring. And on top of that, if
Speaker 1: you have the at it freeze in place, you really
Speaker 1: almost don't even need credit monitoring either. YEA monitoring is
Speaker 1: basically pointless at that point, because let's just watch something
Speaker 1: that's completely locked down. Yeah. Yeah. And by the way,
Speaker 1: that a couple of our favorite websites for you to
Speaker 1: sign up for free credit monitoring on if you do
Speaker 1: want to go that route, Our credit sesame and Credit Karma.
Speaker 1: Will link to both of those in the show notes
Speaker 1: as well. But those are just great sites for being
Speaker 1: able to monitor your credit and it's free. There are
Speaker 1: all these services out there that want to charge you,
Speaker 1: especially from the credit bureaus. Don't do it. Get the
Speaker 1: free stuff, that's all you need, and then get your
Speaker 1: five dollar check in the mail when it finally come.
Speaker 1: I hope it's more than five bucks. But you mentioned
Speaker 1: the Washington posts telling everybody to actually take the monitoring instead.
Speaker 1: That's because they want their money. They're thinking, if we
Speaker 1: tell enough people to go with monitoring, that means we
Speaker 1: get a bigger check. Yep, it's true, it's true. But
Speaker 1: people need to know, man, they need another truth. And
Speaker 1: also on that website, when you go there, you will
Speaker 1: see some other options there if you to make a claim,
Speaker 1: you can see if you can actually prove that you
Speaker 1: were damaged somehow, and you can prove it, you could
Speaker 1: be eligible to up to twenty thousand dollars and damages
Speaker 1: and that's a lot of money. That's that's no joke
Speaker 1: right there. However, I think the ability to prove that
Speaker 1: might be extremely difficult, and if that's something you want
Speaker 1: to pursue, though, be sure to check that out. I
Speaker 1: think the standard of proving that the Equifax breach was
Speaker 1: responsible for some sort of major identity the problem in
Speaker 1: your life, it might be a hard standard to prove.
Speaker 1: But if you believe that's the case, and you've had
Speaker 1: trouble since the breach and you've had to do a
Speaker 1: lot to repair those issues, I would say it's totally
Speaker 1: worth filing the claim on the website and trying to
Speaker 1: get payment for the damages that you've incurred. Let's go
Speaker 1: ahead and get to the beer for this episode. Man,
Speaker 1: we have Whitelaw wheats. Uh. This is by crank Arm
Speaker 1: Brewing Company. Cody and Raleigh sent this one to us
Speaker 1: and it's crank On Brewing because that's a bike part.
Speaker 1: Did you pick up on that bike, especially because the
Speaker 1: label has bikes all that has got bikes all over it.
Speaker 1: And he sent it to us as well because he
Speaker 1: is part of a nonprofit called Oaks and Spokes and
Speaker 1: they promote bicycling there in the city of Raleigh, North Carolina.
Speaker 1: So be sure to check them out. And I'm excited
Speaker 1: to share our thoughts on this beer at the end
Speaker 1: of this episode. Yeah, Cody, sounds like my kind of guy.
Speaker 1: This sounds like my kind of beer. Can't wait to
Speaker 1: drink it and let people know what we think. And
Speaker 1: by the way, this was a gold medal winner in
Speaker 1: the wheat category at the Great American Beer Festival. Here
Speaker 1: has got some hardware on its shelf, right, I like it. Yeah,
Speaker 1: it's a good one to be trying today. So all right, Matt,
Speaker 1: Now let's get onto the topic at hand. For this episode,
Speaker 1: we're talking about how to rebuild a rough credit score.
Speaker 1: And we've talked before about the problems of having a
Speaker 1: bad credit score. You know, you and I both agree
Speaker 1: that it is probably not good how much of our
Speaker 1: lives revolver on this one score that these three bureaus
Speaker 1: create on us without our permission. That's just not a
Speaker 1: great system. But because the system is currently set up
Speaker 1: the way it is, it's really important if you have
Speaker 1: bad credit that you work towards rebuilding it. And so
Speaker 1: we we've got a lot of information to share about
Speaker 1: how you can get your kind of credit back up
Speaker 1: on its feet after a rough patch, and gonna try
Speaker 1: to hit a lot of important points today on that subject. Yeah, Joel,
Speaker 1: you just sort of touched on this, and it's kind
Speaker 1: of unfortunate, right, Like you said that so much of
Speaker 1: our life revolves around the credit score, but it really
Speaker 1: is so important. A couple of reasons is that great
Speaker 1: credit can be used to secure just a really good
Speaker 1: term for a home loan, versus if you have poor credit,
Speaker 1: you might end up with a crappy loan, or you
Speaker 1: just might get turned down altogether. Bad credit could also
Speaker 1: cause you to pay more of your car at home
Speaker 1: insurance as well, And we've actually mentioned this on previous episodes,
Speaker 1: but if you have bad credit when it comes to
Speaker 1: government jobs, there's certain security clearances that they will not
Speaker 1: allow you to have because of your bad credit because
Speaker 1: of the potential for security issues. So that's definitely something
Speaker 1: to keep in mind. Yeah, you might even have a
Speaker 1: hard time getting a place to rent because landlords are
Speaker 1: often pulling your credit and making judgments about you based
Speaker 1: on that. So yeah, bad credit just all around makes
Speaker 1: things harder for you. Actually pulled your credit before we
Speaker 1: became friends, just to make sure, like you know, you're
Speaker 1: of my ilk, just to make sure that we can hang.
Speaker 1: You know. There have been studies about dating relationships and
Speaker 1: how people different credit scores mixed. I find that so
Speaker 1: fascinating that typically when asked the question about their potential
Speaker 1: mates and their credit score, oftentimes people want someone of
Speaker 1: a similar credit score to them, right, They want to
Speaker 1: be with someone who's responsible in that way. So, and
Speaker 1: by the way, some issues of credit will linger longer
Speaker 1: for you. Like let's say you've had a bankruptcy in
Speaker 1: the last seven to ten years or a foreclosure in
Speaker 1: the past seven years. Well, those things are going to
Speaker 1: affect your credit for longer periods of time. Some of
Speaker 1: the steps that we're going to talk about today, you
Speaker 1: know what, they'll still be able to help you if
Speaker 1: you've had a bankruptcy or a foreclosure, but what they
Speaker 1: can't do is wipe those completely off your record. Also,
Speaker 1: if you've been divorced, it doesn't necessarily impact your credit score,
Speaker 1: but it can depending on how things are divided up
Speaker 1: in the divorce and how your former partner treats joint
Speaker 1: accounts that you're on together, it can affect your credit
Speaker 1: score as well. So they're all these things that could
Speaker 1: affect your credit score and could send it plummeting. But
Speaker 1: there are a lot of ways to kind of write
Speaker 1: the ship. Yeah, Unfortunately, there could be some malicious spending.
Speaker 1: Is that what you're referring to. It comes to, you know,
Speaker 1: relationships going south, or just even in the divorce decree,
Speaker 1: right the finalization, where maybe there's a lack of understanding
Speaker 1: over who's supposed to tackle what, or your former spouse
Speaker 1: has issues with income and whatever. They've been tasked with
Speaker 1: paying the bills they've been tasked with paying that you
Speaker 1: still are joint on. They don't pay, and so that
Speaker 1: can lead to hardship for you, even though that's not
Speaker 1: supposed to be your responsibility. Man, Yeah, that's a huge bummer.
Speaker 1: And regarding timing of this entire thing, right, it's it's
Speaker 1: important to note that change like your credit score isn't
Speaker 1: gonna change and it's not gonna happen overnight. You could
Speaker 1: likely see some movement in thirty to sixty days, but
Speaker 1: it's not going to be an immediate thing. But as
Speaker 1: you are rebuilding your score, it's best to go ahead
Speaker 1: and keep track your score. And it's sort of like
Speaker 1: we mentioned earlier, that's gotten so much easier these days.
Speaker 1: Many credit card companies will offer you just free monthly updates.
Speaker 1: I'm pretty sure all the major card carriers offer that. Yeah.
Speaker 1: For we talked about this before too. It used to
Speaker 1: be shrouded in secrecy. I remember back in the day,
Speaker 1: I had like the one card from Washington Mutual. They
Speaker 1: gave me access to my credit score every month. I
Speaker 1: was like, this is so great. But now it's almost
Speaker 1: readily available through through almost everywhere. Yeah, they're all offering it.
Speaker 1: But if you don't have a card, or if you
Speaker 1: happen to have a card that doesn't offer that. Again,
Speaker 1: like we mentioned at the beginning, be sure to check
Speaker 1: out either credit Karma a site like that, or even
Speaker 1: the credit score card dot com. Joe and I are
Speaker 1: both a fan of that. That is discover cards separate sites,
Speaker 1: and if you have a discover card, you can actually
Speaker 1: linked to it from your credit card homepage or your
Speaker 1: dashboard whatever you wanna call it. Yeah, and even if
Speaker 1: you don't have a Discover card, you can use the
Speaker 1: site for free, which is really exactly gives you your
Speaker 1: FICO credit score, which is really nice. And just keep
Speaker 1: in mind though that every time you check that score,
Speaker 1: it doesn't hurt your credit. This is just your score.
Speaker 1: This is different than having your actual credit report being
Speaker 1: pulled by a creditor, So don't feel nervous that this
Speaker 1: is actually gonna being your credit a little bit. You
Speaker 1: can go in there and look at it three or
Speaker 1: four times a day if you want to. But maybe
Speaker 1: that's unhealthy too. Yeah, maybe don't obsess over the credit score.
Speaker 1: It is a nice thing to start getting under control.
Speaker 1: To to have a good credit score is important, but yeah,
Speaker 1: don't obsess every because you know, there are those people
Speaker 1: out there to who want the eight hundred fifty credit score.
Speaker 1: They want it to be perfect, and we've said to
Speaker 1: that's kind of a full You know, anyone that has
Speaker 1: an eight fifty Have you ever met anyone that's even
Speaker 1: if you achieve eight fifty for a second, what's the point.
Speaker 1: It doesn't matter. It doesn't matter. And then on top
Speaker 1: of that, there are all these little things that could
Speaker 1: bump it down five, six, ten points and then you
Speaker 1: have to bump it right back up again, and so
Speaker 1: there's just really no point to strive for perfection here. Yeah, perfection,
Speaker 1: that's not what we're going for. We're going for like
Speaker 1: really good or good enough, and we're gonna talk about
Speaker 1: how you can actually achieve that right after the break,
Speaker 1: all right, Matt we're back. We're talking about how to
Speaker 1: rebuild if you've got a rough credit score. And you
Speaker 1: mentioned right before the brake buddy that good enough is
Speaker 1: a good thing to be aiming for, not perfection exactly. Yeah.
Speaker 1: What is good enough though? Right? Yeah, And that's that's
Speaker 1: a question I think that would pop up in people's minds.
Speaker 1: So let's say you are rebuilding a rough credit score.
Speaker 1: You're you're in the five hundreds or something like that.
Speaker 1: A couple of mile markers to keep in mind on
Speaker 1: your journey are scores of six eight and seven forty
Speaker 1: and six eighty kind of gets you it east into
Speaker 1: this kind of mid tier of being able to to
Speaker 1: get good rates, of being back into a state of
Speaker 1: like credit decency. Right. And then another great mile marker
Speaker 1: to set your sights on is getting that score of
Speaker 1: seven forty. That's when you're gonna really qualify for pretty
Speaker 1: much the best rates from almost any lender out there.
Speaker 1: So those are just good things to keep in mind.
Speaker 1: If you're looking low, you're in the five hundreds, low,
Speaker 1: six hundreds, strive for six ad make that your goal
Speaker 1: and uh, and we're gonna tell you how you can
Speaker 1: hit that goal right now, yeah, Joel. Basically, there's a
Speaker 1: hierarchy of of things that affect your credit score, and
Speaker 1: we're gonna start with the things that affect your score
Speaker 1: the most. The number one thing is to make sure
Speaker 1: that you are paying your existing accounts on time. Uh.
Speaker 1: This is gonna have the biggest impact making up of
Speaker 1: your credit score. What that means is you do not
Speaker 1: want to miss a payments on anything. It's easy to
Speaker 1: set a recurring calendar reminder. And even easier is that
Speaker 1: you can go to your credit cards, for instance, and
Speaker 1: you can set it up on auto pay. It's not
Speaker 1: hard to you just like full statement balance or it'll
Speaker 1: say total new balance. But that's a way if you
Speaker 1: are forgetful to make sure that you never miss a payment,
Speaker 1: make sure you have that set up to automatically pay. Yeah,
Speaker 1: it just makes sense that that's the number one thing
Speaker 1: influencing your credit score, right, and if you can pay
Speaker 1: your bills on time over a long period of time,
Speaker 1: that's gonna have great ramifications on your credits. Have banks,
Speaker 1: credit cards, lenders, they all like to see that you
Speaker 1: pay your bills on time because they like to get
Speaker 1: paid on time. Another thing is prioritized paying down your
Speaker 1: balances to keep them under a utilization threshold of thirty.
Speaker 1: That might have sounded a little fancy utilization threshold, but essentially,
Speaker 1: the less of your available credit that you're actually using,
Speaker 1: the better it looks on your credit score. So let's
Speaker 1: say you have a credit card that has a ten
Speaker 1: tho dollar available credit limit and you're using eight thousand
Speaker 1: dollars of that available credit limit too much? Too much? Right? Yeah,
Speaker 1: that doesn't look good. It makes it look like you're
Speaker 1: using your credit irresponsibly or that you just need that credit, right.
Speaker 1: I mean, the banks don't mind having high limits of
Speaker 1: say ten thousand dollars, even maybe on a business card,
Speaker 1: but they to see you just use a little bit
Speaker 1: of it because that looks like, oh, I've got all
Speaker 1: this available to me, but I only need just a
Speaker 1: little bit, don't you worry? That's what makes you look
Speaker 1: the best. Right. If you have a ton of available
Speaker 1: credit but only use a little bit, your credit score
Speaker 1: goes up. One way to kind of game the system
Speaker 1: and make it look like you're using less of your
Speaker 1: credit then you actually are, is to pay your bills
Speaker 1: twice a month, especially on those credit cards, right, instead
Speaker 1: of paying just once a month, pay money towards that
Speaker 1: credit card balance before the statement even comes. If you
Speaker 1: do that, it looks like you're using less of your
Speaker 1: credit when the credit card company reports your balance to
Speaker 1: the credit bureaus. So that's kind of just a way
Speaker 1: to gain the system a little bit, make your utilization
Speaker 1: look lower and enhance your overall credit score. And personally,
Speaker 1: that's actually how I pay my credit card. I don't
Speaker 1: pay it twice a month, but I just pay it
Speaker 1: off at the end of the month. I actually don't
Speaker 1: wait for the statement to come through. Uh. To me,
Speaker 1: the statements are completely worthless because by the time that
Speaker 1: statement actually comes out, I've already paid the previous balance
Speaker 1: for that specific calendar month. And for us, that's just
Speaker 1: a way that we're able to keep our spending in
Speaker 1: check and make sure that we are sticking to the
Speaker 1: amount that we've budgeted for that specific month. Yeah, the
Speaker 1: two things we just mentioned, Matt are are really good
Speaker 1: for people even with good credit. And so now we're
Speaker 1: about to kind of get into some of the things
Speaker 1: that are really applicable to folks with poor credit right now.
Speaker 1: And getting a regular credit card can be helpful if
Speaker 1: you don't have enough available credit. But the problem is,
Speaker 1: if you have poor credit, actually being approved for another
Speaker 1: credit card is in all likelihood outside of your reach.
Speaker 1: You're gonna get turned down because your credit is really poor.
Speaker 1: So if you don't qualify for a regular credit card,
Speaker 1: there are other ways to begin building that credit back up,
Speaker 1: the first of which is to get a secured credit card.
Speaker 1: Your local credit union is a potentially great place to
Speaker 1: turn for secured credit card. Walk in there and talk
Speaker 1: to someone at your local credit union branch. Ask if
Speaker 1: they have some sort of credit builder program available. If so,
Speaker 1: strongly consider applying for a card through them. Amazon actually
Speaker 1: has a new credit Builder card as well. And what
Speaker 1: doesn't Amazon have these days? Right? I know, right? It's
Speaker 1: in edible in. One other place to turn for a
Speaker 1: credit card if you have really bad credit is a
Speaker 1: website called pedal card dot com p e t a
Speaker 1: l card dot com and pedal Card offers a regular
Speaker 1: credit card to people with poor credit by using other
Speaker 1: factors to determine your credit worthiness and the way secure
Speaker 1: credit cards work. Uh, you know, you can get those
Speaker 1: again through your credit union or even Amazon evidently, but
Speaker 1: they require up front deposits because basically you have bad credit,
Speaker 1: and so they want you to put money down essentially
Speaker 1: to prove that you have something on the line that
Speaker 1: you're not just gonna walk away and continue to damage
Speaker 1: your credit over time. You can sort of take those
Speaker 1: training wheels off and you can get a regular card
Speaker 1: by proving that you can handle your credit well. But
Speaker 1: essentially that you know that money down, it just access
Speaker 1: collateral and that's what makes that card a secured card.
Speaker 1: Think about your home loan, that's that's a secured loan
Speaker 1: because that note is against your house. Same thing with
Speaker 1: the vehicle. With a car loan, they have something that
Speaker 1: they can come after. And in this case with the
Speaker 1: credit card, if you put down the money and you
Speaker 1: get that secured card set up, well, if you don't
Speaker 1: pay your bills, well guess what they have that deposit
Speaker 1: to offset that risk. Yeah. And by the way, on
Speaker 1: that Amazon credit card, mat interestingly enough, you can graduate
Speaker 1: to a real credit card through Amazon in seven months
Speaker 1: of handling that secured credit card. Well, so it really
Speaker 1: is kind of this training wheels thing to get you
Speaker 1: to pedaling on your own on a bike. It's yeah,
Speaker 1: we love those bike analogies. By the way, always always
Speaker 1: up for using a good bike analogy. That's for sure.
Speaker 1: Something else that you need to do to help rebuild
Speaker 1: your credit score. You want to make sure you are
Speaker 1: keeping your old cards open and active. Uh, the length
Speaker 1: of your credit history makes up of your credit score.
Speaker 1: The previous two items we've talked about combined make up
Speaker 1: sixt so definitely those are the big heavy hitters, but
Speaker 1: these other aspects are really important as well. Keep those
Speaker 1: cards open. If you're attempted to overspend on those cards,
Speaker 1: you know at that point they might be worth closing.
Speaker 1: But hopefully, if you're rebuilding your credit score, you're also
Speaker 1: taking control of your spending as well, so hopefully that's
Speaker 1: not a problem. And also you want to make sure
Speaker 1: that you're periodically using those cards as well, because sometimes
Speaker 1: certain credit card issuers they might even close an account
Speaker 1: if there's been an activity, and they don't actually have
Speaker 1: to tell you that they're going to close your account.
Speaker 1: Some folks say to use it every quarter, like every
Speaker 1: three or four months. Personally, man, I've used cards like
Speaker 1: once a year, and that's more than enough I found
Speaker 1: in my personal use to keep an account active and
Speaker 1: maintain that really long history. Yeah, you don't want to
Speaker 1: cancel credit cards, especially if you are in the act
Speaker 1: of rebuilding your credit score. Closing cards takes a bite
Speaker 1: out of your score and you're working towards raising it,
Speaker 1: that's just a bad move to make. Another important part
Speaker 1: of your credit score is your credit mix. So as
Speaker 1: you have different credit cards and different loan products that
Speaker 1: you're paying on every month, that will naturally increase the
Speaker 1: mix of your credit which is helpful to your overall score.
Speaker 1: And doing something like a credit Builder loan can not
Speaker 1: only be helpful in establishing a history of payments, but
Speaker 1: it can also help your credit mix look good. So
Speaker 1: there's this interesting website called self lender dot com. Self
Speaker 1: Lender essentially allows you to open a credit Builder account
Speaker 1: and you choose the payment term and dollar amount that
Speaker 1: you want to spend. And every time you pay a
Speaker 1: monthly payment towards this self lender account that you have opened,
Speaker 1: you're building credit history for yourself. And once you've paid
Speaker 1: off the credit Builder account, you have this CD that
Speaker 1: unlocks and the money is yours and that CD is
Speaker 1: even earning interest. So self lender is this really kind
Speaker 1: of cool way around it. It's like getting a loan
Speaker 1: from yourself and repaying it. It's just kind of a cool,
Speaker 1: interesting tool. Man. I think this is a super cool tool. Like, essentially,
Speaker 1: you're you're kind of putting your own credit score on
Speaker 1: layaway because, like like you mentioned, you get these loans
Speaker 1: and it's held by a self lender. At the end
Speaker 1: of the term you unlock it. It's almost like this
Speaker 1: little treasure chest where you've been sort of stashing away money,
Speaker 1: except for it's your own money because you took out
Speaker 1: the loan yourself, but you haven't had access to it.
Speaker 1: Super cool. I think it's an awesome way to, like
Speaker 1: you said, not only establish a history of making payments
Speaker 1: on time, but to also improve your credit mix because
Speaker 1: this is an installment loan, which is different than revolving credit,
Speaker 1: which is what credit cards are. So in the credit bureaus,
Speaker 1: they really like to see that you have those two
Speaker 1: different types of debt. Yeah, that you're handling credit cards well,
Speaker 1: that you're handling and install it loan well. So rebuilding
Speaker 1: your credit score essentially in doing it on both fronts
Speaker 1: by tackling your revolving credit and then having an installment
Speaker 1: loan that you're paying off on time in full every month.
Speaker 1: These are the ways that you're going to be able
Speaker 1: to affect your score and see it rise more quickly.
Speaker 1: Chances are, if you have a pretty poor credit score,
Speaker 1: you're gonna have to take a lot of these steps
Speaker 1: in order to turn your score around, which means you're
Speaker 1: gonna see your credit score actually drop a little bit
Speaker 1: in the short term because you're applying for and opening
Speaker 1: a lot of new lines of credit. We shouldn't be
Speaker 1: overly focused on the short term effects of our credit score.
Speaker 1: The goal is to rebuild it for the long term,
Speaker 1: because you have given your score enough time to rebound
Speaker 1: that way, it is looking healthy and strong way down
Speaker 1: the road when the time does come for you to
Speaker 1: apply for a mortgage, maybe get some new insurance rates
Speaker 1: that are going to be lower. Again, all the different
Speaker 1: things that are going to be affected by a better
Speaker 1: credit score. Yeah, a five to seven point drop for
Speaker 1: opening a new line of credit isn't that big of
Speaker 1: a deal when we're talking about a score in the
Speaker 1: five hundreds or low six hundreds. Like you said, we're
Speaker 1: looking at the long term, alright, Matt. And there are
Speaker 1: people also that prey on folks who are looking to
Speaker 1: raise credit scores. There are people out there promising short
Speaker 1: term fixes for upfront money. We're gonna tackle that and
Speaker 1: a few more tips on how to rebuild your credit
Speaker 1: score effectively right after the break. All right, we are
Speaker 1: back from the break, Joel. Let's now talk about some
Speaker 1: more specific things that you can do when you are
Speaker 1: repairing your credit score. When you're trying to rebuild it,
Speaker 1: let's do it. One of the first things to do
Speaker 1: is to look over your actual credit reports. Now, at
Speaker 1: the beginning, we talked about checking your credit score, say
Speaker 1: through a credit card company, but you also want to
Speaker 1: make sure that you pull your actual credit report. On
Speaker 1: the report you can check for inaccurate information, because there
Speaker 1: might be some incorrect information on there that could be
Speaker 1: hurting your credit score, and you definitely want to make
Speaker 1: sure that you dispute that to get that off of
Speaker 1: your report. Yeah, more than anything, you want to make
Speaker 1: sure that it's not inaccurate information that's messing you up.
Speaker 1: And the only place that you should go in order
Speaker 1: to get your credit reports for free is a web
Speaker 1: called annual Credit report dot com. So make sure you're
Speaker 1: going there and not anywhere else. Most other places on
Speaker 1: the internet you're gonna be charged money in order to
Speaker 1: get your credit report at annual credit report dot com.
Speaker 1: You get it for free by federal law, and you
Speaker 1: can actually get one from every credit bureau for free
Speaker 1: once a year. So if you spread them out, you
Speaker 1: can get a free credit report once every four months.
Speaker 1: So that's actually pretty sweet. Something else that you can
Speaker 1: consider is becoming an authorized user on someone else's card, Matt,
Speaker 1: someone who has a nicer credit score, maybe than you do.
Speaker 1: Can I join up? You've got a great score, I
Speaker 1: know you do. It would be an equal three legged
Speaker 1: race if you and I linked up like that. That's true,
Speaker 1: that's true, But keep in mind that this could also
Speaker 1: hurt you if that person doesn't use credit. Well, so
Speaker 1: in that three legged race example, if you link yourself
Speaker 1: up to someone who actually isn't that great of a racer,
Speaker 1: well they're gonna drag you down instead of actually helping
Speaker 1: you out. Yeah. If I become an authorized user on
Speaker 1: your credit card, mat and then you stop paying your bills,
Speaker 1: that's gonna hurt my credit score. But if I have
Speaker 1: a bad credit score and I become an authorized user
Speaker 1: on one of your cards and you continue to pay
Speaker 1: your bills on time and in full, it's gonna make
Speaker 1: me look great, which is the whole reason I'm asking
Speaker 1: you to do that for me, right, Yeah, And what's
Speaker 1: great too with an authorized user is that you don't
Speaker 1: even have to get the card. Even just being linked
Speaker 1: to that account gives you the benefits. So that's great
Speaker 1: from the person who does have the better score because
Speaker 1: it keeps any potential risk at bay. Right. So someone
Speaker 1: were to be, say, an authorized user on someone's card. Again,
Speaker 1: you read the benefits of the user's credit score, but
Speaker 1: if you don't have the card, well, there's no chance
Speaker 1: of you, say, wrecking their credit and overspending causing all
Speaker 1: sorts of problems. They're sure there are still risks, I
Speaker 1: would say to the person that is allowing someone to
Speaker 1: piggyback on their credit. So if someone actually like asked
Speaker 1: the question in one of our ask htm episodes, Hey,
Speaker 1: should I let my friend jump on my credit by
Speaker 1: becoming an authorized user to help improve their score? I
Speaker 1: would probably tell them don't do it, just because there
Speaker 1: are certain risks potentially associated with it. By making them
Speaker 1: an authorized user on your credit card, your giveing them
Speaker 1: access to credit under your name, even if you don't
Speaker 1: give them plastic there are things that could potentially happen.
Speaker 1: What if they get sent with some of those big
Speaker 1: paper checks that you get from credit card companies that say, hey,
Speaker 1: you can spend this money ahead of time. You know
Speaker 1: I'm talking about. Oh yeah, I've never used those, but
Speaker 1: me neither because they come with like a feet huge fees.
Speaker 1: Yeah yeah, so I'll use those. You'll. Speaking of risk,
Speaker 1: there's even more risk associated with co signing. Again, if
Speaker 1: you have bad credits, getting a co signer can help
Speaker 1: you maybe to achieve getting alone with rates that are
Speaker 1: pretty reasonable, maybe even score an apartment that you wouldn't
Speaker 1: be able to otherwise. But there's even more danger for
Speaker 1: the co signer. Though. This is a pretty big ask,
Speaker 1: and like Joel said, I wouldn't ever personally co sign
Speaker 1: for somebody else. If you do realize that you are
Speaker 1: putting yourself at risk, make sure that you've got really
Speaker 1: good communication with this person. Make sure that it's a
Speaker 1: good relationship and that this is something that you can
Speaker 1: easily discuss where things to go sour, and that you're
Speaker 1: ready to pay the bills in all honesty if the
Speaker 1: person that you co signed a loan for doesn't because
Speaker 1: if you who don't keep up those payments, you're the
Speaker 1: one who's also going to end up in default. Another quick,
Speaker 1: potentially helpful resource for folks trying to rebuild their credit
Speaker 1: score is something from one of the credit bureau is
Speaker 1: actually Experience Boost. And granted this is only one bureau
Speaker 1: doing this, and it's probably only an eight to ten
Speaker 1: point bump, but if we're talking about a low credit score,
Speaker 1: and that bump can really help, and so Experience Boost
Speaker 1: is free and it's worth considering if you're trying to
Speaker 1: increase your score. Basically, what Experience is doing, it's giving
Speaker 1: you credit, an actual, actual credit and an actual credit
Speaker 1: boost for paying utility bills that you're normally paying from
Speaker 1: your bank account, just by essentially linking that account and
Speaker 1: letting them see that it's happening. So that's an easy
Speaker 1: way for lots of folks to to get a little
Speaker 1: bit of an improvement on their score. And if you
Speaker 1: are rebuilding your credit, something else that you need to
Speaker 1: hear make sure that you are not paying someone to
Speaker 1: help rebuild your credit. Those sites, those services typically are
Speaker 1: not going to be worth your money, and oftentimes their scams.
Speaker 1: It can be really tempting because we all want that
Speaker 1: magic bullet instead of what we need to do is
Speaker 1: just change our habits. We need to do that work
Speaker 1: in order to get our credit score back in a
Speaker 1: good range. So be warned, once you start googling how
Speaker 1: to repair your credit you're just gonna start seeing these
Speaker 1: ads and just run away from them. You just want
Speaker 1: to completely avoid these different quote unquote services. Yeah, these
Speaker 1: credit repair firms are going to promise a lot and
Speaker 1: deliver very little often. They're going to ask for money upfront.
Speaker 1: They are going to promise that they'll remove negative information
Speaker 1: from your credit report, which isn't true. They just can't
Speaker 1: actually remove accurate information from your credit report. So anyone
Speaker 1: that promises these things while asking you for money running
Speaker 1: the other direction as quickly as possible. It's really nice
Speaker 1: to think that you can repair your credit score really
Speaker 1: quickly for a little bit of cash. What Matt and
Speaker 1: I are telling you is that this is a process.
Speaker 1: It takes a little while right to see your credit
Speaker 1: score move. It could take a year or two to
Speaker 1: get it into the range where you feel comfortable to
Speaker 1: kind of cross those mile markers that we discussed earlier
Speaker 1: of getting to a six eighty or seven forty credit
Speaker 1: score to see if let's say you've had a bankruptcy
Speaker 1: at begin to weigh on your credit less over time.
Speaker 1: There's no quick fix to getting your credit back on track.
Speaker 1: It's going to take your intentionality and hard work. But
Speaker 1: if you follow some of the things we've outlined in
Speaker 1: this episode, you're gonna get there, that's for sure. Yeah.
Speaker 1: Like a lot of great things in life, oftentimes it
Speaker 1: just takes a little bit of time. True debt. All right,
Speaker 1: let's take it back to the beer. On this episode,
Speaker 1: we had White Wall Wheat, which was by crank Arm
Speaker 1: Brewing Send into Us by Cody and Raleigh. What were
Speaker 1: your thoughts on this beer, Buddy, I'm gonna tell you
Speaker 1: what I can see why. This was a gold medal
Speaker 1: winner at the Great American Beer Festival. This was a
Speaker 1: really really good beer. This is a style that I
Speaker 1: don't know if we've had it on the show, maybe
Speaker 1: only once. Yeah, if we've had it before, I can't
Speaker 1: specifically remember which one it was. Yeah. So this is
Speaker 1: a Belgian whit beer, and I will say I really
Speaker 1: really enjoy this beer. Typically these beers have a lot
Speaker 1: of coriander in them, and I actually hate coriander. It's
Speaker 1: not one of my favorite flavors. This one avoided the
Speaker 1: coriander and actually had a little bit more of a
Speaker 1: hot presence, So I thoroughly enjoyed this one. It was light, refreshing,
Speaker 1: a little bit of juicy, a little bit of hoppy,
Speaker 1: but the Belgian yeast kind of came through on this beer. Man,
Speaker 1: I really like this one. I think it's a crushable
Speaker 1: summer beverage with a lot of flavor. Yeah. Well, Joel
Speaker 1: on the Canus says it's an American bell Goo style Wits,
Speaker 1: and I think that American there in the title. I
Speaker 1: think that might indicate some of that hot presence which
Speaker 1: gave it that lighter flavor profile. It's to me, it's
Speaker 1: almost like a Belgian light beer where didn't have those
Speaker 1: core inder flavors. You didn't have the banana going on,
Speaker 1: it didn't have those Belgian yeasts all kind of stacking
Speaker 1: up and providing this more Belgian style of beer. It
Speaker 1: drink a lot cleaner, almost like a light pilsner or
Speaker 1: a lagger almost, but with some more interesting fresh flavors
Speaker 1: going on. Certainly a great beer for the summer, and
Speaker 1: I could also see how it's associated with biking, because
Speaker 1: this is the kind of beer I would totally want
Speaker 1: to drink after a hot, sweaty long ride. Yeah, no
Speaker 1: doubt this beer. You're completely right. It's like an American
Speaker 1: in a Belgian got married in a nice sixteen ounced
Speaker 1: beer can so mad. Props to Crank carm Brewing for
Speaker 1: this beer. Very very good, and a huge thanks to
Speaker 1: Cody for sending it our way. We really appreciate it, man.
Speaker 1: And you know, this bright blue label, it actually looks
Speaker 1: really good sitting next to this creamy yellow glass of
Speaker 1: beer as well. So anytime there's that interplay between the
Speaker 1: packaging and the beer, I'm always a fan of that.
Speaker 1: I always love when the beer looks tantalizing in the glass,
Speaker 1: and this one definitely did all right, Matt. But quickly,
Speaker 1: let's get to our final thoughts for this episode. If
Speaker 1: you're trying to rebuild your credit, the two most important
Speaker 1: things you need to keep in mind are paying your
Speaker 1: accounts in full on time everyoneth Missing payments is going
Speaker 1: to be one of the biggest detriments to your score. Also,
Speaker 1: prioritize paying down your balances. Lowering the amount of credit
Speaker 1: that you're actually using is going to help that credit
Speaker 1: utilization ratio that we discussed. That is going to make
Speaker 1: you look more credit worthy and it's going to have
Speaker 1: a big effect on actually raising your credit score. And
Speaker 1: one of the best ways to do both of those things, Joel,
Speaker 1: is to lane yourself a secured credit card. Those cards
Speaker 1: will require some money up front, but that is how
Speaker 1: you score one of those. Be sure to check out
Speaker 1: Pedal Card and Amazon's new credit Builder card as well,
Speaker 1: and also make sure that you are checking out some
Speaker 1: of those credit builder loans suff lenders specifically, a product
Speaker 1: like that will allow you to establish that history of
Speaker 1: paying your accounts on time while at the same time
Speaker 1: improving your credit mix. But above all, don't pay anyone
Speaker 1: else to rebuild your credit score. It's not an easy fix.
Speaker 1: It takes a little bit of time, and you can
Speaker 1: do this, all right, Matt, That's gonna do it for
Speaker 1: this episode and listeners. If you want to find show
Speaker 1: notes for this episode, they'll be up on our website
Speaker 1: at how to money dot com. And if you found
Speaker 1: this episode helpful or entertaining, or some combination of the both,
Speaker 1: we would love for you to leave a review for
Speaker 1: us over at Apple Podcasts and you know what, even
Speaker 1: if you've already left a review, just leave another one.
Speaker 1: I think Joel's left us like ten or eleven reviews
Speaker 1: already because I leave it how it works. I leave
Speaker 1: it under my grandma's account, my cousins, like anybody like.
Speaker 1: I just try to try to make us look good.
Speaker 1: You know, have you ever even used an Apple product? Joel, No,
Speaker 1: I refuse, I refuse. I stay away, but we would
Speaker 1: love a review from you if you haven't already they alright, buddy,
Speaker 1: until next time, Best friends out, Best Friends Out.