WEBVTT - Rebuilding a Rough Credit Score #113 0:00:00.080 --> 0:00:02.880 Welcome to How the Money. I'm Joel and I'm Matt, 0:00:03.160 --> 0:00:06.160 and today we're talking about how to rebuild a rough 0:00:06.200 --> 0:00:28.800 credit score. Yeah, Joel, you know, having a good credit score, 0:00:28.840 --> 0:00:31.240 it is so important these days. We're gonna talk about 0:00:31.240 --> 0:00:33.400 why it is so important, and of course, how to 0:00:33.520 --> 0:00:35.920 rebuild it if your scores in the gutter a little bit. 0:00:36.000 --> 0:00:38.879 But speaking of credit score, let's talk about Equifax, because 0:00:39.120 --> 0:00:40.519 did you did you look it up and see if 0:00:40.560 --> 0:00:43.320 you were one of the people affected. Yes, I did, Matt. 0:00:43.400 --> 0:00:47.120 And by the way, that free money, right, yeah, exactly. 0:00:47.240 --> 0:00:49.640 So it seems like based on the numbers, almost every 0:00:49.640 --> 0:00:53.040 adult American was affected. Half of the adults in the 0:00:53.120 --> 0:00:55.120 United States, like half of anybody that had a Social 0:00:55.160 --> 0:00:58.520 Security number was affected. So it's a big problem, right, 0:00:58.520 --> 0:01:01.680 And so we talked a while about freezing your credit 0:01:01.720 --> 0:01:04.360 and how important that is, and especially in light of 0:01:04.680 --> 0:01:07.240 essentially all of our information with the Capital One breach, 0:01:07.280 --> 0:01:09.920 with the Equifax breach, breaches everywhere, and I think there's 0:01:09.959 --> 0:01:13.280 just breach fatigue essentially exactly. And that was episode thirty eight, 0:01:13.280 --> 0:01:14.960 by the way, that we talked about freezing your credit, 0:01:15.040 --> 0:01:17.760 and that is incredibly important because that is the only 0:01:17.840 --> 0:01:20.520 way to actually prevent fraudulent accounts for being opened in 0:01:20.560 --> 0:01:23.639 your name. Yeah, and now, because of the Equifax breach 0:01:23.720 --> 0:01:26.400 and laws that were put into place, credit freeze is 0:01:26.440 --> 0:01:28.360 free for us. So that's great. So everyone should be 0:01:28.360 --> 0:01:30.640 freezing their credit. But now at least you know what 0:01:30.959 --> 0:01:33.120 we can get recompense. We can get a little bit 0:01:33.160 --> 0:01:36.760 of payout from the Equifax breach for our information just 0:01:36.800 --> 0:01:39.120 being leaked out there, and so people need to know 0:01:39.160 --> 0:01:40.840 about this. The website where you can go to make 0:01:40.880 --> 0:01:44.479 a claim is Equifax Breach Settlement dot com. We'll link 0:01:44.520 --> 0:01:46.640 to it in the show notes as well. Essentially, they 0:01:46.680 --> 0:01:49.600 allow you to choose from free credit monitoring or up 0:01:49.600 --> 0:01:52.280 to a hundred and twenty five dollars, but there's also 0:01:52.360 --> 0:01:55.320 a cap on the overall amount that Equifax is going 0:01:55.360 --> 0:01:59.400 to pay under the settlement that they reached with the FTC. Yeah. 0:01:59.480 --> 0:02:01.960 Well it was seven million dollar payomp, but only a 0:02:02.000 --> 0:02:04.680 small percentage of that is actually going to us as 0:02:04.680 --> 0:02:07.360 those affected. So basically the more people that sign up 0:02:07.680 --> 0:02:11.560 and make that claim, well the payout decreases per person. Yeah, 0:02:11.639 --> 0:02:15.120 so it actually being is is actually there's a slim 0:02:15.240 --> 0:02:17.640 chance of that happening. Yeah, it's unlikely for sure. But 0:02:17.720 --> 0:02:20.400 and the other thing is that people instead of choosing 0:02:20.400 --> 0:02:25.080 the bucks, you can choose four years of free credit monitoring. 0:02:25.480 --> 0:02:27.800 And I've read some stories from papers around the country 0:02:27.840 --> 0:02:30.480 and they're basically pushing people in that direction. They're saying, 0:02:30.800 --> 0:02:32.560 like the Washington Post is like, here's why you need 0:02:32.600 --> 0:02:35.400 to choose the free credit monitoring over the money, and 0:02:35.760 --> 0:02:38.040 I have to respectfully disagree. I think if you were 0:02:38.040 --> 0:02:40.919 affected in any way by the Equifax breach, you should 0:02:40.960 --> 0:02:44.840 be applying for the cash payment, not the credit monitoring. 0:02:45.160 --> 0:02:48.600 And that's because if you just basically assent to the 0:02:48.600 --> 0:02:50.720 fact that you have credit monitoring, that you have some 0:02:50.720 --> 0:02:53.640 sort of credit monitoring, you can take the cash instead. 0:02:53.880 --> 0:02:57.000 And there are awesome free options for you when it 0:02:57.000 --> 0:02:59.320 comes to credit monitoring. And on top of that, if 0:02:59.320 --> 0:03:02.200 you have the at it freeze in place, you really 0:03:02.240 --> 0:03:05.239 almost don't even need credit monitoring either. YEA monitoring is 0:03:05.280 --> 0:03:08.240 basically pointless at that point, because let's just watch something 0:03:08.240 --> 0:03:11.919 that's completely locked down. Yeah. Yeah. And by the way, 0:03:11.960 --> 0:03:14.400 that a couple of our favorite websites for you to 0:03:14.720 --> 0:03:17.320 sign up for free credit monitoring on if you do 0:03:17.440 --> 0:03:21.440 want to go that route, Our credit sesame and Credit Karma. 0:03:21.600 --> 0:03:23.119 Will link to both of those in the show notes 0:03:23.120 --> 0:03:25.600 as well. But those are just great sites for being 0:03:25.639 --> 0:03:28.880 able to monitor your credit and it's free. There are 0:03:28.880 --> 0:03:30.799 all these services out there that want to charge you, 0:03:31.000 --> 0:03:33.680 especially from the credit bureaus. Don't do it. Get the 0:03:33.680 --> 0:03:35.720 free stuff, that's all you need, and then get your 0:03:35.720 --> 0:03:37.240 five dollar check in the mail when it finally come. 0:03:37.560 --> 0:03:39.400 I hope it's more than five bucks. But you mentioned 0:03:39.400 --> 0:03:42.920 the Washington posts telling everybody to actually take the monitoring instead. 0:03:43.240 --> 0:03:47.040 That's because they want their money. They're thinking, if we 0:03:47.080 --> 0:03:50.080 tell enough people to go with monitoring, that means we 0:03:50.120 --> 0:03:53.080 get a bigger check. Yep, it's true, it's true. But 0:03:53.120 --> 0:03:55.520 people need to know, man, they need another truth. And 0:03:55.600 --> 0:03:57.480 also on that website, when you go there, you will 0:03:57.520 --> 0:03:59.560 see some other options there if you to make a claim, 0:03:59.600 --> 0:04:02.200 you can see if you can actually prove that you 0:04:02.400 --> 0:04:05.480 were damaged somehow, and you can prove it, you could 0:04:05.480 --> 0:04:09.200 be eligible to up to twenty thousand dollars and damages 0:04:09.360 --> 0:04:11.280 and that's a lot of money. That's that's no joke 0:04:11.400 --> 0:04:14.160 right there. However, I think the ability to prove that 0:04:14.320 --> 0:04:17.760 might be extremely difficult, and if that's something you want 0:04:17.760 --> 0:04:19.680 to pursue, though, be sure to check that out. I 0:04:19.680 --> 0:04:22.400 think the standard of proving that the Equifax breach was 0:04:22.640 --> 0:04:25.320 responsible for some sort of major identity the problem in 0:04:25.320 --> 0:04:27.400 your life, it might be a hard standard to prove. 0:04:27.720 --> 0:04:29.840 But if you believe that's the case, and you've had 0:04:29.839 --> 0:04:31.760 trouble since the breach and you've had to do a 0:04:31.800 --> 0:04:34.080 lot to repair those issues, I would say it's totally 0:04:34.080 --> 0:04:36.200 worth filing the claim on the website and trying to 0:04:36.240 --> 0:04:39.040 get payment for the damages that you've incurred. Let's go 0:04:39.040 --> 0:04:40.800 ahead and get to the beer for this episode. Man, 0:04:40.920 --> 0:04:44.440 we have Whitelaw wheats. Uh. This is by crank Arm 0:04:44.480 --> 0:04:47.400 Brewing Company. Cody and Raleigh sent this one to us 0:04:47.440 --> 0:04:49.720 and it's crank On Brewing because that's a bike part. 0:04:50.279 --> 0:04:52.720 Did you pick up on that bike, especially because the 0:04:52.800 --> 0:04:54.760 label has bikes all that has got bikes all over it. 0:04:54.800 --> 0:04:56.640 And he sent it to us as well because he 0:04:56.800 --> 0:04:59.040 is part of a nonprofit called Oaks and Spokes and 0:04:59.080 --> 0:05:02.520 they promote bicycling there in the city of Raleigh, North Carolina. 0:05:02.640 --> 0:05:04.719 So be sure to check them out. And I'm excited 0:05:04.800 --> 0:05:07.120 to share our thoughts on this beer at the end 0:05:07.120 --> 0:05:09.240 of this episode. Yeah, Cody, sounds like my kind of guy. 0:05:09.320 --> 0:05:10.880 This sounds like my kind of beer. Can't wait to 0:05:10.920 --> 0:05:12.800 drink it and let people know what we think. And 0:05:12.839 --> 0:05:17.400 by the way, this was a gold medal winner in 0:05:17.640 --> 0:05:20.440 the wheat category at the Great American Beer Festival. Here 0:05:20.480 --> 0:05:22.960 has got some hardware on its shelf, right, I like it. Yeah, 0:05:23.000 --> 0:05:25.160 it's a good one to be trying today. So all right, Matt, 0:05:25.200 --> 0:05:28.720 Now let's get onto the topic at hand. For this episode, 0:05:29.000 --> 0:05:31.719 we're talking about how to rebuild a rough credit score. 0:05:32.080 --> 0:05:34.599 And we've talked before about the problems of having a 0:05:34.640 --> 0:05:36.960 bad credit score. You know, you and I both agree 0:05:37.040 --> 0:05:39.040 that it is probably not good how much of our 0:05:39.080 --> 0:05:42.280 lives revolver on this one score that these three bureaus 0:05:42.600 --> 0:05:45.120 create on us without our permission. That's just not a 0:05:45.120 --> 0:05:47.800 great system. But because the system is currently set up 0:05:47.800 --> 0:05:49.840 the way it is, it's really important if you have 0:05:49.920 --> 0:05:52.840 bad credit that you work towards rebuilding it. And so 0:05:52.960 --> 0:05:54.960 we we've got a lot of information to share about 0:05:54.960 --> 0:05:57.440 how you can get your kind of credit back up 0:05:57.480 --> 0:06:00.400 on its feet after a rough patch, and gonna try 0:06:00.440 --> 0:06:03.280 to hit a lot of important points today on that subject. Yeah, Joel, 0:06:03.279 --> 0:06:04.840 you just sort of touched on this, and it's kind 0:06:04.839 --> 0:06:07.039 of unfortunate, right, Like you said that so much of 0:06:07.040 --> 0:06:09.240 our life revolves around the credit score, but it really 0:06:09.320 --> 0:06:11.640 is so important. A couple of reasons is that great 0:06:11.680 --> 0:06:13.920 credit can be used to secure just a really good 0:06:14.000 --> 0:06:17.080 term for a home loan, versus if you have poor credit, 0:06:17.360 --> 0:06:19.159 you might end up with a crappy loan, or you 0:06:19.240 --> 0:06:21.880 just might get turned down altogether. Bad credit could also 0:06:21.920 --> 0:06:23.400 cause you to pay more of your car at home 0:06:23.440 --> 0:06:26.560 insurance as well, And we've actually mentioned this on previous episodes, 0:06:26.560 --> 0:06:28.120 but if you have bad credit when it comes to 0:06:28.200 --> 0:06:31.200 government jobs, there's certain security clearances that they will not 0:06:31.240 --> 0:06:33.920 allow you to have because of your bad credit because 0:06:33.920 --> 0:06:36.840 of the potential for security issues. So that's definitely something 0:06:36.880 --> 0:06:38.960 to keep in mind. Yeah, you might even have a 0:06:38.960 --> 0:06:42.680 hard time getting a place to rent because landlords are 0:06:42.680 --> 0:06:46.599 often pulling your credit and making judgments about you based 0:06:46.600 --> 0:06:48.960 on that. So yeah, bad credit just all around makes 0:06:49.000 --> 0:06:51.200 things harder for you. Actually pulled your credit before we 0:06:51.240 --> 0:06:53.599 became friends, just to make sure, like you know, you're 0:06:53.640 --> 0:06:55.520 of my ilk, just to make sure that we can hang. 0:06:56.240 --> 0:06:59.400 You know. There have been studies about dating relationships and 0:06:59.400 --> 0:07:02.080 how people different credit scores mixed. I find that so 0:07:02.160 --> 0:07:06.480 fascinating that typically when asked the question about their potential 0:07:06.600 --> 0:07:10.360 mates and their credit score, oftentimes people want someone of 0:07:10.440 --> 0:07:12.000 a similar credit score to them, right, They want to 0:07:12.000 --> 0:07:14.880 be with someone who's responsible in that way. So, and 0:07:14.920 --> 0:07:17.720 by the way, some issues of credit will linger longer 0:07:17.760 --> 0:07:20.160 for you. Like let's say you've had a bankruptcy in 0:07:20.160 --> 0:07:22.920 the last seven to ten years or a foreclosure in 0:07:22.960 --> 0:07:25.360 the past seven years. Well, those things are going to 0:07:25.400 --> 0:07:28.120 affect your credit for longer periods of time. Some of 0:07:28.120 --> 0:07:30.320 the steps that we're going to talk about today, you 0:07:30.320 --> 0:07:31.920 know what, they'll still be able to help you if 0:07:31.960 --> 0:07:34.280 you've had a bankruptcy or a foreclosure, but what they 0:07:34.320 --> 0:07:37.160 can't do is wipe those completely off your record. Also, 0:07:37.160 --> 0:07:40.480 if you've been divorced, it doesn't necessarily impact your credit score, 0:07:40.520 --> 0:07:43.120 but it can depending on how things are divided up 0:07:43.120 --> 0:07:46.760 in the divorce and how your former partner treats joint 0:07:46.760 --> 0:07:49.560 accounts that you're on together, it can affect your credit 0:07:49.600 --> 0:07:51.960 score as well. So they're all these things that could 0:07:51.960 --> 0:07:54.480 affect your credit score and could send it plummeting. But 0:07:54.560 --> 0:07:56.040 there are a lot of ways to kind of write 0:07:56.040 --> 0:07:58.880 the ship. Yeah, Unfortunately, there could be some malicious spending. 0:07:59.000 --> 0:08:00.960 Is that what you're referring to. It comes to, you know, 0:08:01.040 --> 0:08:03.800 relationships going south, or just even in the divorce decree, 0:08:03.880 --> 0:08:06.920 right the finalization, where maybe there's a lack of understanding 0:08:06.960 --> 0:08:09.679 over who's supposed to tackle what, or your former spouse 0:08:09.960 --> 0:08:13.000 has issues with income and whatever. They've been tasked with 0:08:13.120 --> 0:08:15.400 paying the bills they've been tasked with paying that you 0:08:15.640 --> 0:08:18.600 still are joint on. They don't pay, and so that 0:08:18.640 --> 0:08:20.960 can lead to hardship for you, even though that's not 0:08:21.000 --> 0:08:24.120 supposed to be your responsibility. Man, Yeah, that's a huge bummer. 0:08:24.160 --> 0:08:26.320 And regarding timing of this entire thing, right, it's it's 0:08:26.320 --> 0:08:29.080 important to note that change like your credit score isn't 0:08:29.120 --> 0:08:32.520 gonna change and it's not gonna happen overnight. You could 0:08:32.640 --> 0:08:35.440 likely see some movement in thirty to sixty days, but 0:08:35.559 --> 0:08:38.000 it's not going to be an immediate thing. But as 0:08:38.080 --> 0:08:39.920 you are rebuilding your score, it's best to go ahead 0:08:39.960 --> 0:08:42.440 and keep track your score. And it's sort of like 0:08:42.440 --> 0:08:44.680 we mentioned earlier, that's gotten so much easier these days. 0:08:44.720 --> 0:08:48.640 Many credit card companies will offer you just free monthly updates. 0:08:48.679 --> 0:08:51.560 I'm pretty sure all the major card carriers offer that. Yeah. 0:08:51.600 --> 0:08:53.520 For we talked about this before too. It used to 0:08:53.520 --> 0:08:55.840 be shrouded in secrecy. I remember back in the day, 0:08:55.880 --> 0:08:58.160 I had like the one card from Washington Mutual. They 0:08:58.200 --> 0:09:00.079 gave me access to my credit score every month. I 0:09:00.120 --> 0:09:01.760 was like, this is so great. But now it's almost 0:09:01.800 --> 0:09:04.800 readily available through through almost everywhere. Yeah, they're all offering it. 0:09:04.840 --> 0:09:06.920 But if you don't have a card, or if you 0:09:06.960 --> 0:09:09.000 happen to have a card that doesn't offer that. Again, 0:09:09.040 --> 0:09:10.719 like we mentioned at the beginning, be sure to check 0:09:10.760 --> 0:09:13.240 out either credit Karma a site like that, or even 0:09:13.280 --> 0:09:15.480 the credit score card dot com. Joe and I are 0:09:15.520 --> 0:09:18.440 both a fan of that. That is discover cards separate sites, 0:09:18.520 --> 0:09:20.160 and if you have a discover card, you can actually 0:09:20.160 --> 0:09:23.080 linked to it from your credit card homepage or your 0:09:23.160 --> 0:09:25.440 dashboard whatever you wanna call it. Yeah, and even if 0:09:25.480 --> 0:09:27.160 you don't have a Discover card, you can use the 0:09:27.200 --> 0:09:28.960 site for free, which is really exactly gives you your 0:09:28.960 --> 0:09:31.240 FICO credit score, which is really nice. And just keep 0:09:31.240 --> 0:09:33.040 in mind though that every time you check that score, 0:09:33.320 --> 0:09:35.360 it doesn't hurt your credit. This is just your score. 0:09:35.440 --> 0:09:38.319 This is different than having your actual credit report being 0:09:38.360 --> 0:09:40.600 pulled by a creditor, So don't feel nervous that this 0:09:40.640 --> 0:09:42.280 is actually gonna being your credit a little bit. You 0:09:42.280 --> 0:09:43.559 can go in there and look at it three or 0:09:43.559 --> 0:09:45.600 four times a day if you want to. But maybe 0:09:45.600 --> 0:09:49.440 that's unhealthy too. Yeah, maybe don't obsess over the credit score. 0:09:49.440 --> 0:09:51.400 It is a nice thing to start getting under control. 0:09:51.440 --> 0:09:54.040 To to have a good credit score is important, but yeah, 0:09:54.080 --> 0:09:55.880 don't obsess every because you know, there are those people 0:09:55.880 --> 0:09:57.880 out there to who want the eight hundred fifty credit score. 0:09:57.880 --> 0:09:59.199 They want it to be perfect, and we've said to 0:09:59.360 --> 0:10:00.920 that's kind of a full You know, anyone that has 0:10:00.920 --> 0:10:04.680 an eight fifty Have you ever met anyone that's even 0:10:04.760 --> 0:10:07.280 if you achieve eight fifty for a second, what's the point. 0:10:07.320 --> 0:10:09.680 It doesn't matter. It doesn't matter. And then on top 0:10:09.679 --> 0:10:11.360 of that, there are all these little things that could 0:10:11.360 --> 0:10:13.840 bump it down five, six, ten points and then you 0:10:13.880 --> 0:10:15.400 have to bump it right back up again, and so 0:10:15.600 --> 0:10:18.840 there's just really no point to strive for perfection here. Yeah, perfection, 0:10:19.000 --> 0:10:21.200 that's not what we're going for. We're going for like 0:10:21.280 --> 0:10:23.840 really good or good enough, and we're gonna talk about 0:10:23.920 --> 0:10:26.280 how you can actually achieve that right after the break, 0:10:35.480 --> 0:10:37.080 all right, Matt we're back. We're talking about how to 0:10:37.080 --> 0:10:39.520 rebuild if you've got a rough credit score. And you 0:10:39.559 --> 0:10:42.199 mentioned right before the brake buddy that good enough is 0:10:42.240 --> 0:10:44.800 a good thing to be aiming for, not perfection exactly. Yeah. 0:10:44.840 --> 0:10:46.800 What is good enough though? Right? Yeah, And that's that's 0:10:46.800 --> 0:10:48.680 a question I think that would pop up in people's minds. 0:10:48.800 --> 0:10:50.720 So let's say you are rebuilding a rough credit score. 0:10:50.720 --> 0:10:52.480 You're you're in the five hundreds or something like that. 0:10:52.679 --> 0:10:54.600 A couple of mile markers to keep in mind on 0:10:54.640 --> 0:10:58.000 your journey are scores of six eight and seven forty 0:10:58.400 --> 0:11:00.559 and six eighty kind of gets you it east into 0:11:00.600 --> 0:11:02.840 this kind of mid tier of being able to to 0:11:02.880 --> 0:11:05.880 get good rates, of being back into a state of 0:11:05.920 --> 0:11:09.680 like credit decency. Right. And then another great mile marker 0:11:09.760 --> 0:11:11.640 to set your sights on is getting that score of 0:11:11.679 --> 0:11:14.199 seven forty. That's when you're gonna really qualify for pretty 0:11:14.280 --> 0:11:16.880 much the best rates from almost any lender out there. 0:11:17.160 --> 0:11:19.120 So those are just good things to keep in mind. 0:11:19.320 --> 0:11:21.400 If you're looking low, you're in the five hundreds, low, 0:11:21.440 --> 0:11:24.000 six hundreds, strive for six ad make that your goal 0:11:24.200 --> 0:11:26.559 and uh, and we're gonna tell you how you can 0:11:26.640 --> 0:11:29.839 hit that goal right now, yeah, Joel. Basically, there's a 0:11:29.920 --> 0:11:32.400 hierarchy of of things that affect your credit score, and 0:11:32.440 --> 0:11:34.800 we're gonna start with the things that affect your score 0:11:34.800 --> 0:11:36.959 the most. The number one thing is to make sure 0:11:37.000 --> 0:11:40.559 that you are paying your existing accounts on time. Uh. 0:11:40.559 --> 0:11:43.680 This is gonna have the biggest impact making up of 0:11:43.760 --> 0:11:46.360 your credit score. What that means is you do not 0:11:46.440 --> 0:11:49.720 want to miss a payments on anything. It's easy to 0:11:49.760 --> 0:11:53.280 set a recurring calendar reminder. And even easier is that 0:11:53.360 --> 0:11:55.160 you can go to your credit cards, for instance, and 0:11:55.160 --> 0:11:57.200 you can set it up on auto pay. It's not 0:11:57.320 --> 0:12:00.440 hard to you just like full statement balance or it'll 0:12:00.440 --> 0:12:03.320 say total new balance. But that's a way if you 0:12:03.360 --> 0:12:05.840 are forgetful to make sure that you never miss a payment, 0:12:06.120 --> 0:12:09.040 make sure you have that set up to automatically pay. Yeah, 0:12:09.040 --> 0:12:11.280 it just makes sense that that's the number one thing 0:12:11.720 --> 0:12:13.480 influencing your credit score, right, and if you can pay 0:12:13.480 --> 0:12:16.120 your bills on time over a long period of time, 0:12:16.320 --> 0:12:19.360 that's gonna have great ramifications on your credits. Have banks, 0:12:19.360 --> 0:12:21.160 credit cards, lenders, they all like to see that you 0:12:21.160 --> 0:12:23.079 pay your bills on time because they like to get 0:12:23.080 --> 0:12:26.360 paid on time. Another thing is prioritized paying down your 0:12:26.360 --> 0:12:30.319 balances to keep them under a utilization threshold of thirty. 0:12:31.040 --> 0:12:34.560 That might have sounded a little fancy utilization threshold, but essentially, 0:12:34.600 --> 0:12:37.320 the less of your available credit that you're actually using, 0:12:37.679 --> 0:12:39.720 the better it looks on your credit score. So let's 0:12:39.720 --> 0:12:41.959 say you have a credit card that has a ten 0:12:42.000 --> 0:12:45.240 tho dollar available credit limit and you're using eight thousand 0:12:45.280 --> 0:12:49.040 dollars of that available credit limit too much? Too much? Right? Yeah, 0:12:49.240 --> 0:12:50.840 that doesn't look good. It makes it look like you're 0:12:50.920 --> 0:12:54.240 using your credit irresponsibly or that you just need that credit, right. 0:12:54.320 --> 0:12:56.560 I mean, the banks don't mind having high limits of 0:12:56.679 --> 0:12:59.600 say ten thousand dollars, even maybe on a business card, 0:12:59.640 --> 0:13:01.240 but they to see you just use a little bit 0:13:01.240 --> 0:13:03.120 of it because that looks like, oh, I've got all 0:13:03.120 --> 0:13:05.000 this available to me, but I only need just a 0:13:05.000 --> 0:13:06.839 little bit, don't you worry? That's what makes you look 0:13:06.880 --> 0:13:09.280 the best. Right. If you have a ton of available 0:13:09.280 --> 0:13:11.880 credit but only use a little bit, your credit score 0:13:12.160 --> 0:13:15.120 goes up. One way to kind of game the system 0:13:15.520 --> 0:13:17.920 and make it look like you're using less of your 0:13:17.960 --> 0:13:20.440 credit then you actually are, is to pay your bills 0:13:20.600 --> 0:13:23.560 twice a month, especially on those credit cards, right, instead 0:13:23.559 --> 0:13:25.880 of paying just once a month, pay money towards that 0:13:25.920 --> 0:13:28.720 credit card balance before the statement even comes. If you 0:13:28.760 --> 0:13:30.760 do that, it looks like you're using less of your 0:13:30.760 --> 0:13:33.800 credit when the credit card company reports your balance to 0:13:33.880 --> 0:13:36.040 the credit bureaus. So that's kind of just a way 0:13:36.080 --> 0:13:38.360 to gain the system a little bit, make your utilization 0:13:38.400 --> 0:13:41.280 look lower and enhance your overall credit score. And personally, 0:13:41.320 --> 0:13:43.000 that's actually how I pay my credit card. I don't 0:13:43.000 --> 0:13:44.640 pay it twice a month, but I just pay it 0:13:44.679 --> 0:13:46.320 off at the end of the month. I actually don't 0:13:46.320 --> 0:13:48.520 wait for the statement to come through. Uh. To me, 0:13:48.600 --> 0:13:51.000 the statements are completely worthless because by the time that 0:13:51.000 --> 0:13:53.640 statement actually comes out, I've already paid the previous balance 0:13:53.720 --> 0:13:56.520 for that specific calendar month. And for us, that's just 0:13:56.559 --> 0:13:58.439 a way that we're able to keep our spending in 0:13:58.559 --> 0:14:00.360 check and make sure that we are sticking to the 0:14:00.400 --> 0:14:03.480 amount that we've budgeted for that specific month. Yeah, the 0:14:03.720 --> 0:14:05.760 two things we just mentioned, Matt are are really good 0:14:05.800 --> 0:14:08.000 for people even with good credit. And so now we're 0:14:08.040 --> 0:14:09.640 about to kind of get into some of the things 0:14:09.679 --> 0:14:13.640 that are really applicable to folks with poor credit right now. 0:14:13.880 --> 0:14:16.640 And getting a regular credit card can be helpful if 0:14:16.679 --> 0:14:19.640 you don't have enough available credit. But the problem is, 0:14:19.880 --> 0:14:24.400 if you have poor credit, actually being approved for another 0:14:24.440 --> 0:14:27.680 credit card is in all likelihood outside of your reach. 0:14:27.760 --> 0:14:30.800 You're gonna get turned down because your credit is really poor. 0:14:30.920 --> 0:14:33.280 So if you don't qualify for a regular credit card, 0:14:33.520 --> 0:14:35.960 there are other ways to begin building that credit back up, 0:14:36.200 --> 0:14:38.600 the first of which is to get a secured credit card. 0:14:38.840 --> 0:14:41.880 Your local credit union is a potentially great place to 0:14:41.920 --> 0:14:44.440 turn for secured credit card. Walk in there and talk 0:14:44.520 --> 0:14:47.080 to someone at your local credit union branch. Ask if 0:14:47.080 --> 0:14:51.000 they have some sort of credit builder program available. If so, 0:14:51.040 --> 0:14:54.320 strongly consider applying for a card through them. Amazon actually 0:14:54.320 --> 0:14:56.920 has a new credit Builder card as well. And what 0:14:57.080 --> 0:14:59.760 doesn't Amazon have these days? Right? I know, right? It's 0:14:59.760 --> 0:15:02.160 in edible in. One other place to turn for a 0:15:02.160 --> 0:15:05.160 credit card if you have really bad credit is a 0:15:05.160 --> 0:15:07.800 website called pedal card dot com p e t a 0:15:08.040 --> 0:15:11.440 l card dot com and pedal Card offers a regular 0:15:11.480 --> 0:15:14.880 credit card to people with poor credit by using other 0:15:14.920 --> 0:15:17.720 factors to determine your credit worthiness and the way secure 0:15:17.720 --> 0:15:19.880 credit cards work. Uh, you know, you can get those 0:15:19.920 --> 0:15:22.800 again through your credit union or even Amazon evidently, but 0:15:22.840 --> 0:15:27.160 they require up front deposits because basically you have bad credit, 0:15:27.240 --> 0:15:29.120 and so they want you to put money down essentially 0:15:29.160 --> 0:15:31.240 to prove that you have something on the line that 0:15:31.280 --> 0:15:33.560 you're not just gonna walk away and continue to damage 0:15:33.560 --> 0:15:36.040 your credit over time. You can sort of take those 0:15:36.040 --> 0:15:37.800 training wheels off and you can get a regular card 0:15:37.920 --> 0:15:40.280 by proving that you can handle your credit well. But 0:15:40.400 --> 0:15:42.800 essentially that you know that money down, it just access 0:15:42.840 --> 0:15:45.960 collateral and that's what makes that card a secured card. 0:15:46.240 --> 0:15:48.480 Think about your home loan, that's that's a secured loan 0:15:48.520 --> 0:15:51.360 because that note is against your house. Same thing with 0:15:51.400 --> 0:15:53.560 the vehicle. With a car loan, they have something that 0:15:53.560 --> 0:15:55.760 they can come after. And in this case with the 0:15:55.760 --> 0:15:57.680 credit card, if you put down the money and you 0:15:57.720 --> 0:15:59.760 get that secured card set up, well, if you don't 0:15:59.760 --> 0:16:01.880 pay your bills, well guess what they have that deposit 0:16:01.960 --> 0:16:04.200 to offset that risk. Yeah. And by the way, on 0:16:04.200 --> 0:16:07.600 that Amazon credit card, mat interestingly enough, you can graduate 0:16:07.640 --> 0:16:10.960 to a real credit card through Amazon in seven months 0:16:11.040 --> 0:16:13.720 of handling that secured credit card. Well, so it really 0:16:13.800 --> 0:16:15.520 is kind of this training wheels thing to get you 0:16:15.560 --> 0:16:17.280 to pedaling on your own on a bike. It's yeah, 0:16:17.320 --> 0:16:20.040 we love those bike analogies. By the way, always always 0:16:20.080 --> 0:16:21.840 up for using a good bike analogy. That's for sure. 0:16:22.120 --> 0:16:24.320 Something else that you need to do to help rebuild 0:16:24.320 --> 0:16:25.720 your credit score. You want to make sure you are 0:16:25.800 --> 0:16:29.840 keeping your old cards open and active. Uh, the length 0:16:29.880 --> 0:16:32.720 of your credit history makes up of your credit score. 0:16:32.920 --> 0:16:35.960 The previous two items we've talked about combined make up 0:16:36.040 --> 0:16:39.240 sixt so definitely those are the big heavy hitters, but 0:16:39.400 --> 0:16:42.200 these other aspects are really important as well. Keep those 0:16:42.200 --> 0:16:44.720 cards open. If you're attempted to overspend on those cards, 0:16:44.760 --> 0:16:46.960 you know at that point they might be worth closing. 0:16:47.400 --> 0:16:49.640 But hopefully, if you're rebuilding your credit score, you're also 0:16:49.680 --> 0:16:52.920 taking control of your spending as well, so hopefully that's 0:16:52.960 --> 0:16:54.840 not a problem. And also you want to make sure 0:16:54.840 --> 0:16:58.239 that you're periodically using those cards as well, because sometimes 0:16:58.240 --> 0:17:01.040 certain credit card issuers they might even close an account 0:17:01.040 --> 0:17:03.160 if there's been an activity, and they don't actually have 0:17:03.240 --> 0:17:04.960 to tell you that they're going to close your account. 0:17:05.320 --> 0:17:07.600 Some folks say to use it every quarter, like every 0:17:07.640 --> 0:17:10.240 three or four months. Personally, man, I've used cards like 0:17:10.280 --> 0:17:12.639 once a year, and that's more than enough I found 0:17:12.640 --> 0:17:14.720 in my personal use to keep an account active and 0:17:14.800 --> 0:17:17.280 maintain that really long history. Yeah, you don't want to 0:17:17.280 --> 0:17:20.040 cancel credit cards, especially if you are in the act 0:17:20.080 --> 0:17:23.240 of rebuilding your credit score. Closing cards takes a bite 0:17:23.240 --> 0:17:25.639 out of your score and you're working towards raising it, 0:17:25.800 --> 0:17:28.080 that's just a bad move to make. Another important part 0:17:28.080 --> 0:17:30.760 of your credit score is your credit mix. So as 0:17:30.800 --> 0:17:33.919 you have different credit cards and different loan products that 0:17:33.960 --> 0:17:36.720 you're paying on every month, that will naturally increase the 0:17:36.760 --> 0:17:39.119 mix of your credit which is helpful to your overall score. 0:17:39.520 --> 0:17:42.560 And doing something like a credit Builder loan can not 0:17:42.600 --> 0:17:45.359 only be helpful in establishing a history of payments, but 0:17:45.400 --> 0:17:48.040 it can also help your credit mix look good. So 0:17:48.160 --> 0:17:51.680 there's this interesting website called self lender dot com. Self 0:17:51.760 --> 0:17:55.399 Lender essentially allows you to open a credit Builder account 0:17:55.920 --> 0:17:58.760 and you choose the payment term and dollar amount that 0:17:58.840 --> 0:18:01.960 you want to spend. And every time you pay a 0:18:02.000 --> 0:18:05.560 monthly payment towards this self lender account that you have opened, 0:18:05.760 --> 0:18:08.280 you're building credit history for yourself. And once you've paid 0:18:08.280 --> 0:18:10.840