Autism mom Shanté Nicole is a credit expert. In Episode 5, we’re joined by the dynamic owner of Financial Common Cents to talk all things credit: Scores, reports, and all those myths and misconceptions that can actually derail your progress.
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Joyce: Hi, this is Joyce and welcome to Mom Autism Money. Today we’re going to be chatting with Shanté Nicole about credit score, FICO and much more.
Brynne: Yes. And Shanté is just so great. We’re so excited to have her here with us today. Now Shanté Nicole’s passion for serving others has always been at the center of her life.
She is an autism mom, wife, author, financial fitness coach, kids money coach, certified credit consultant, holds a degree in nursing and is the founder of her nonprofit organization FACE and Financial Common Cents. Her mission is to educate and empower individuals to make better financial decisions in regards to rebuilding and repairing their credit, budgeting, developing savings strategies and debt management.
She is a panelist for SunTrust Bank’s onUp financial campaign and also facilitates workshops in the Washington Metro area. She’s also the founder of Kids Making Cents, a financial literacy program that offers educational products and workshops in the community, including schools, churches, and recreational camps.
In January of 2017, she created the online Facebook community Financial Common Cents. There are currently over 96,000 members from over 100 countries. She utilizes her platform to inspire and educate her audiences through physical and digital products, webinars and courses. Without further ado, let’s talk to Shanté.
Brynne: All right. And we are here today with Shanté Nicole of Financial Common Cents. Hi Shanté. Thank you so much for being with us.
Shanté: Thanks for having me.
Brynne: And we are going to talk today about a few things, but Shanté, I was wondering first, if you might want to tell us about your experience as an autism mom and how you kind of make that work with your business.
I know that you’ve got FACE. You’ve got a couple of different projects going on and I’m just perpetually impressed by how you seem to balance it all.
Shanté: Thank you. Thank you. Thank you. So I can say, so my son he’s 15 years old. He has autism. He was the inspiration behind me starting FACE in the first place that stands for facing autism with children everywhere.
And you know, it was just once I got on Facebook and started to see how many people like nationwide and even worldwide, were actually going through what we deal with as well. I was like, wow, like it’s not just me or my circle here in Maryland. There’s people in New York, people in New Zealand, people in Africa.
So I wanted to let everyone know, like I’m facing it with all of you guys as children everywhere. Right. So, um, the first thing I did was connect with a lot of groups on Facebook, like join all these groups and just connect and see like, where are you on the journey? My son is four and your son is 13.
Share with me where, you know, some things that you’ve done. And now Dillon’s 15. Now I’m talking to the people who have grown children, like, because that’s the next transition for us. And so, but I’m also tapping back into the ones who are like, my son is two and just diagnosed, I’m at a loss. I’m like, yeah, I was there.
Let me help you out. And so I’m always directing them different resources and things like that locally, I was before the pandemic, unfortunately, going into different companies and doing autism awareness trainings for them. So they know how to handle someone they may encounter with autism. So police departments, barbershops and hair salons.
When the young kids come in, they don’t really know how to handle them. When the hair, the Clippers are too close to the ears or the, the waters pressures too hard. And so really doing those sessions with them. And then that went into starting my respite program, which I was really excited about because the biggest thing I would see people say in these groups and parents, I would talk through was that, we don’t get a break. We don’t trust anybody with our kids. My child is seven and he’s still in pull ups. No one wants to watch him. So I was like, you know, I feel you because I feel the same way, but I would love to offer this, you know, experience for you. So in 2014, I started at FACE’s place, which was a respite care program on a weekend.
And the parents, oh, they would drop those kids off and run out the door. Um, and we just, you know, kept them from 10 to two. Every second Saturday we have music therapists come in, dogs came in, we had moon bounces and movie time and arts and crafts. And so just the time for the parents to really just release, relax, you know, no stress even just for four hours.
And so I did that for a while and then that catapulted into a summer camp, just for kids with special needs. And I did that every year from 2015 until the pandemic. So unfortunately I miss my babies, but, and so now Dylan is here with me. I don’t work with my babies anymore. Um, and it’s been, it’s, it’s been a challenge.
I have to say. He’s very mild as far as his temperament. So no meltdowns, no. He’s not aggressive, things like that. We don’t have to worry about, but he doesn’t have the language that typical teenager would have. And so he can’t tell me all of his needs. He can tell me what he wants, you know, French fries.
Of course you can tell me that, but if something hurts or someone harmed him, he couldn’t tell me those things. So that’s the biggest challenge for us. But, um, because he’s so self-sufficient, balancing him and work isn’t really difficult, um, while he’s in school. But, I homeschooled him last year and that was a challenge.
He keeps me on my toes. He learns really quickly. So I was always like, I know what teachers go through trying to plan lessons because I wasalways planning lessons. Trying to help my clients with their finances and things like that. And then you insert the pandemic where people are losing jobs, they’re being furloughed, they don’t have the funds.
What does that mean for my business? So I was really scared when the pandemic began, I’m like, oh, here goes that. There goes FCC. You know, I have lasted three years now I’m down the drain already, you know? So, um, but I actually, my business spikedbigger than it has been busier than I’ve been ever since I started my business.
And my husband is so, so supportive with this and, you know, he doesn’t have any children, but he adopted my son back in 2016. Um, and so he’s been on his autism ride for a long time because we’ve been best friends since middle school. And so he’s known Dylan and everything like that, but now it’s on a different level.
And so, you know, I say all that to say, managing my business and being an autism mom and a wife, you know, it’s been, it’s been a journey, uh, but nothing comes easy and if it becomes easy then it’s not hard enough for you and it’s not gonna help challenge you. And it’s not going to teach you any lessons, right? The whole idea about life is just, what can I learn from being here?
I got put on this earth for a reason at the time that I got put on this earth, how can I maximize my time here? Because it’s not going to be forever.
Brynne: No, definitely, definitely. And man, during the pandemic, have I been learning some lessons. I just love, how you expanded that and like kind of took your support and expanded it to your community.
That respite care thing is such a huge thing that I feel like not a lot of parents know about. And then at the same time, it is hard because you want to leave your child with somebody who’s qualified. But like, you might not have that qualified person in your circle. And so you wonder about the trust thing.
So I just, I think that’s a really beautiful thing that you’re doing and I’m sure it’ll be back up and running after things, after things are over.
Shanté: I hope so so bad. Cause I can imagine like life has been easy for me during the pandemic. I have to say it could be more difficult, but I know parents who have multiple children, I have one. Multiple children, many of them, probably most of them are on the spectrum.
And then you have school and then you’re virtual. And so I know it’s been a mess. So I know parents are like, I’m about to jump off this deck or I need a break. So I hope that I can start it back up soon.
Joyce: That would be me. I’m a parent of multiple kids on the spectrum. So yes, yes.
Shanté: I know it. I know it. I mean I’ve cared for probably in the last, you know, six, seven years, you know, maybe 250 kids and like none of them are the same, you know, and I’m just thankful that my journey with my son, isn’t difficult because it did allow me to give a lot of my attention to the kids who needed it.
Brynne: You also have your financial community Financial Common Cents. And we’re going to talk a lot about that today. So today we’re going to be talking about Shanté is a credit expert. And so we are going to be talking about all things, credit scores, all of your questions, maybe some misconceptions you might have.
And so we’re going to just delve right into all of that. And Shanté, I want to start things off by just kind of asking you, where do you start with clients when they come to you? What are some of the most common like starting places when it comes to learning about credit?
Shanté: So learning about credit, I always do webinars talk credit 101.
Because people jump into this credit game and they wanted to already start to taking pre-calculus right. And I’m like, listen, there’s some things you have to learn in arithmetic and basic math before you can go to pre-algebra before you can go to algebra you have to take pre algebra. So let’s start from the beginning.
And I’m so glad you said that, that where I start really are clearing up the misconceptions. I’ve heard this, I read here, this other group said that. And so let’s talk about, because if you think those things are true, then that’s how you’re going to try to operate. And I’m like, let’s clear that up. Let’s talk about the facts.
No loopholes, no credit trips, no credit secrets. I see all these books that are like credit secrets. I’m like, there are no secrets. They’re just facts. Right. And so it’s really clearing up those misconceptions and then starting from the beginning, right? Like we talked about a little earlier, you want a better score.
Well, where does that score come from? It comes from your report. Well, where do I pull my reports? Let’s talk about that. Okay. They pull them, they’re reading them and they’re like, I have no idea what I’m reading. So let’s go line by line. So it’s really doing a credit inspection when I tell people that I’m your credit GPS guide.
Okay. When you get into a car and you type into your GPS where you want to go, what’s the most important question is going to ask you first, where are you currently? I can’t tell you how to get where you’re going if I don’t know where you’re starting. And so people do inbox me with a dissertation or a quick snapshot about their credit and say, what do I do?
I’m like, I need to know your exact starting point, right? Or if I’m not going to help you, you need to learn your exact starting point. What do I need to do to meet my goal? Because your starting point is going to be totally different than mine. You know, so, you know, I can have a client named Susan who said, I’m trying to get to the empire state building in New York.
She’s in Texas. Well, I’m trying to get to the empire state building I’m in Maryland. We can both get there, but the way we go are going to be totally different because she’s starting in Texas and I’m in Maryland. So it’s really about clearing up the misconceptions, talking about the facts and then doing a credit inspection before you buy a house, it needs to be inspected to figure out what is wrong and what do we not have to worry about.
Same thing with your credit. Some things people think are wrong. I’m like, that’s actually a good thing to leave on your credit. And some things that people have wrong, they’re like, I don’t know what to do to fix it. So that’s where I come in. We have to inspect your credit. And then we, I need to guide you where you need to go.
So those are the first steps, clear up those misconceptions, lay out the facts and then let’s figure out where you’re starting.
Brynne: For sure, for sure. And like for people who are like level 1 0 1, maybe they’re not into personal finance, maybe they’ve never looked at their credit report before. Can we just start with a super basic conversation about the difference between credit scores and credit reports and some of the different companies that you might encounter and deal with when you’re looking at those two different two different items?
Shanté: Absolutely. So, um, and I always use this analogy when I used to go into middle schools and high schools and colleges, I would say. Tell me how your mommy and daddy know how well you’re doing in school. And they say, Ms. Shanté on my report card, I say, and there’s also a three digit number associated with your report card.
What is that? And they say, my GPA, I said, right. So when you’re talking about credit, your report is what the vendors check to see how well you’re doing with your finances and that three digit number, which is your credit score, comes from the information that’s listed, on your credit report. That’s a such a simple thing to say, but it’s such a big thing that people don’t get.
They think the score is something. And then the report is something and it’s like, no, this score is coming from what’s on your report. Right. And so then it’s like, when I want a high score, well, let’s talk about the things that go into factor, you know, computing, that credit score and that’s, what’s important.
So the difference is your report is what the lenders send to the credit bureaus to update with all the information on how you’re doing with certain accounts. And then that score is pulled from an algorithm based on the things that are on your credit report. Some things matter, some things don’t, even though they may be listed there, don’t think that everything on your report goes into calculating your score.
Cause something like your name or address that has no bearing on how well your score is. So that’s the difference. Your report is listing your information. The number is just — it determines your risk. So the worse your credit is the lower your score. The better your report is the higher your score.
Brynne: What are some of those factors that are going to impact your score? Like what are some of the big things that show up on your credit report? That actually matter?
Shanté: So there are five components that go into calculating a FICO score. I don’t want to say credit score. I want to say FICO score. And I’ll talk about that a little later.
Why I’m saying the difference between the two, but you have five components and I’m going to name them in order of importance. You have your payment history. That’s the highest component payment history. You have utilization. You have your length of credit history. You have your credit mix and your inquiry.
So let me break those down really quickly. Payment history is self-explanatory. How well have you been able to pay people on time that you borrowed money from? Because that’s what credit really is all about. How responsible are you with borrowing money and paying it back? There’s no other way that lenders can see how well you’re doing if you’re not borrowing money and paying people back. So if you don’t have credit, you are still a risk because they’re going to pull your report and see nothing, and they’re going to go, well, we don’t know how well you are doing with borrowing money because you never borrowed money and paid it back. Maybe from your auntie or your uncle, grandma, but not a lender.
Right? And so payment history is the highest component utilization. A lot of people don’t even know this is a factor, let alone how high it ranks it’s right under payment history. And that means how much credit are you using in relation to how much you have available? You have a thousand dollar credit card and you’re using 500 that’s 50%.
That is a no-no. FICO says nuh-uh-uh they’re getting way too risky. They’re almost at that max. So they really don’t want to see more than 30% utilized, but we’ll talk about a great effective way to you use your credit cards to boost your scores a little later, but that is a factor. How much are you using? Are you maxing out your credit card?
Are you using any, so the people who have no credit cards, then you can’t show good utilization. So your scores are going to be affected negatively. If you have credit cards that say, well, years ago I ran them up. As soon as I paid them off, I cut them up. Well, you can’t use what you have cut up. So then that affects you negatively, or you have them and you just say, I just don’t use it. Or I just wait until I have an emergency. That’s going to always affect your score negatively. So you have to use credit, but that doesn’t mean you have to be into debt. Your length of credit history, how long have you had credit established? The newer you are the riskier you are.
When you’re 18 and 19 and just starting out, you’re probably not going to get favorable, you know, credit cards or favorable loans, or you’re going to get them, but the interest is going to be high. Or they’re just going to deny you because they’re saying we’re not going to take a chance on you, we’re not willing to take a risk. We don’t know. Go to somebody else, build your credit up, come back so we can see how well you’re able to manage it.
So new credit is still bad credit. I’ll say it that way. So your credit mix, this is a big one. People are like, I don’t even know what that means. And so there’s two types of credits that are in this world. Um, that’s revolving and installment. So if you hear these fancy terms, let me just tell you what they really mean.
Revolving lines of credit are simply credit cards. That’s it. So if you hear that, How many revolving lines do you have? It means how many credit cards do you have? Because it’s revolving. If you go into a revolving door, it just keeps going around and around until you decide to walk out of the building, which means you can use the card, you pay it back and use the cards.
You pay it back. It’s revolving. It never ends until you actually close it or they close it. Right. But the idea is that we don’t want to close it because we want to keep using it. And then installment. Think about you have a house and you say, I want to build a deck on the back of my home. The contractor comes and builds that deck.
Well, once he’s done, you can’t wake up the next morning and go, you know? I’m just going to just push this five feet to the left, because I don’t like where this contractor placed it, right? It is fixed. So think about those loans that are fixed. Mortgages are fixed. It’s the same amount. Every month. Auto loans are fixed.
Student loans are fixed. A loan from a bank to pay off some debts or get your home renovated. Those are fixed. So FICO wants to see can you manage two different types of loans. We don’t want to see a report with all revolving. We don’t want to see a report with all installment. We want to see a nice, healthy mix.
So even though it’s at the bottom of the totem pole, when it comes to the how scores are calculated, it is really important. If you have only revolving and you add an installment, you’re going to see a nice jump because it’s like, uh-oh, she has the mix now, before you didn’t. Um, and then your new inquiries and your new accounts, okay.
Every time you apply for credit, you take a small hit because FICO was like, oh, a new debt. And then once it reports, it’s like, oh, can we see a new debt? So you’ve got to take those small hits. Typically you do rebound because now that you have a line of credit, it’s like, okay, well now I’m going to have great payment history.
I’m going to show some positive utilization. I’ve added to my mix. I just opened it, but as it grows, I’m going to expand my list of credit history. So don’t be afraid to apply for credit because you’re going to take a hit it’s inevitable. You’re going to take a hit, but you’ll rebound. The thing I like to say is don’t get crazy in the platform, novice stuff in a short amount of time, because that small hit that you would have taken turns into larger hits.
This really happens when people in two ways, you’re trying to build your credit or repair. So you just started applying for every friend of time that comes through the door, every credit card that pops up as an ad on your Facebook, because you’re just trying to build, and you’re really not doing any research to see in the condition that my credit is in which card should I be applying for?
Don’t apply for the Amex, you know, frequent flyer miles card if you’re just starting to build. Apply for the ones that have are gonna be for people in your situation. The other way it happens is Christmas time. Would you like to apply for this card to get a 20% discount? Yes, I would! You go to the next door. Would you like to get a 15% discount?
Yes, I would. And then you leave with seven inquiries. Maybe you didn’t even get approved for all of them. So the inquiries are going to show and you have no accounts to show for it. Lenders are going to look at that and go, what’s wrong with this person. They’re thirsty for debt. They’re thirsty for credits.
We don’t want to take a chance. So even if you have, it’s like people have been denied credit, just simply because it said too many inquiries. So you want to really be careful before you just start trying to rebuild and make sure that you’re doing everything the way you should be, not the way someone else did.
Brynne: Definitely. I have a question about that. Like just, I’ve heard a lot of times people, if you’re applying for like a mortgage or an auto loan or something, because those little hits do add up, some people will tell you to apply for a lot of credit all at once. Like within one day, maybe you go into the dealership and they run your credit with like seven different banks.
Is that a negative thing? Or is that something kind of different when you’re looking to secure a debt like that?
Shanté: That is such an awesome question. Because I did not even think to bring that up. Thank you. So there’s something called rate shopping and FICO is very much aware that consumers do that. When you go buy a car, you do not accept the first loan that they gave you.
They may be 10.9%. They checked with another bank and they said, we’ll give you seven. The last bank said 5.5. Well, you, would’ve never known that if they didn’t check it multiple times. So the first thing is people freak out. They ran my credit 17 times! I didn’t approve that! Well, they were trying to help you. Right? So FICO knows this.
So what they said is any mortgage loans, student loans, like private student loans or auto loans. When you have those inquiries that are done within the 30 days, They will all show on your report as separate individual inquiries, but they will only count as one single inquiry towards your score. So be like one as far as how it calculates and so into your score, but they will all show, people are aware of that.
Most lenders are aware of that. So they, they, they don’t look at that as unsaveable what they look at is I applied for a whole bunch of loans. Versus I applied for whole bunch of credit cards, because those are individual inquiries. Right? Cause you’re not rate shopping with the credit cards, you’re just trying to get approved for whatever leverage that they’ll give you.
So that’s a little bit different than an auto note or mortgage. Even when we refinanced, we went through like three different people before we decided who to go with because we wanted and we try to make sure we did, you know, in the 30 day period. So can only count as one. So yeah, those aren’t bad, but because people are uneducated and they really don’t know, they just like ahhhh 17 inquiries!.
I’m like, you’re fine. So, yeah. That’s a great question. Thanks for asking that.
Brynne: Oh, thank you for answering. This is all very interesting. This was several years back now. This was maybe eight years ago. I want to say.
Brynne: Yeah! Yeah. FICO rolled out a new model where they were like, okay, we’re not going to include medical debt.
And that can be important for families with kids with disabilities, because like a lot of times you do, you end up racking up a lot of medical debt. I’m wondering if you can tell us a little bit more about that and maybe a little bit about situations where that FICO model might not always be applied.
So even though there’s this new method of scoring, you might not benefit from it depending on which score your lender runs, or if I’m just totally off base there.
Shanté: You’re not, you’re not but it’s just there’s so much to dig into. Even before that there are over 28 different FICO scores that exists out here, right? It is important. Not only to know which score you should be focusing on when you’re applying for specific things, but what scores that the lenders that are pulling your scores actually look at because some of them look at all of them.
Some of them look at only two. Some of them only look at one. So that’s another thing. That’s one thing. So let’s start from the beginning. There’s FICO eight, right? That’s the most widely used scoring models. That’s the most generally use scoring model. So when you get free FICO scores from places they typically give you the FICO 8 score, which is a good one.
That’s the one you should know, but they’re also FICO industry scores. So you have FICO auto scores. So we talked about, although the inquiries, when you go apply for a car they’re not going to pull FICO 8, they’re going to pull FICO auto scores because there’s a certain level of risk involved with buying a car than it is with applying for like a secured loan for something you need money for.
Right? Then you have FICO mortgage scores. Those are calculated even much differently because that’s a big, that’s the biggest risk out here. You want a bank to buy a house for you for $300,000, $400,000. If I check your FICO eight score, it might be okay, but your mortgage score, it might be a little lower because there’s some things that are affecting it more than FICO 8 is.
Then you have FICO credit card scores. So when you’re applying for a credit card, they’re going to pull those scores. Then FICO nine came along. That’s the newest scoring model, everyone. Well, that was back in around 2014. We’re now in 2021 and no one’s still using FICO nine. Lenders haven’t migrated to FICO nine, but let me briefly just tell you the changes that they said.
You know, we know that consumers are having a hard time with certain things, and I know there needs to be a major overhaul with how scores are calculated and things like that. So FICO 9 was gonna be something that was really going to help, um, a lot of consumers. And so one thing was medical debt. They said that it’s going to have less of an impact on the score.
So not that it wouldn’t affect it, but if you have a medical collection that’s gonna affect you, um, not as great as a credit card collection or, you know, uh, apartment lease that, you know, you broke or something like that. The biggest thing is pay collections. Pay collections right now. If you get a collection, the damage is done once it hits your report.
So whether you pay or don’t pay, it doesn’t matter. So paying it doesn’t make your score go up and not paying keeps the score as is. Um, so people saying, well, why would I tell you if it’s not going to help my score? Well, let’s go back to where that score comes from the information on your report, even though it doesn’t calculate better score for you, a lender is going to pull your credit and say, oh, they had a collection, but at least they paid.
Right? So I like for people to know, it’s not just about your score. It’s about your overall profile history. Having to pay a collection looks way better than someone who has unpaid right there, say, okay, life happens. We know they took a hit, but they took care of their responsibilities better than someone pulling it in seeing an old collection from four years ago for only $250.
And it’s still sitting there. Why would I give you a loan? If I see that you couldn’t pay somebody for four years, only $250? So those are the things people need to think about. Not just, I want a 700. Making sure that your profile is up to par, right? So that was one thing FICO 9 said when you pay collection, the collection won’t even be calculated into your score anymore.
So not that it increases it, but it just won’t be affecting it. Right. So that was another thing. And then you have rental payments, rental payments right now. Should I sign up for rental karma? Should I sign up for rent reporters? They report my rent. Is that going to help my credit? Well, back then, it’s I can’t say back then, as it stands with current FICO scores, the rent, those payments don’t affect FICO scores.
They affect the Vantage scores. And I know we’re going to talk about that later. So it wasn’t really helpful if you’re applying for things where they pull FICO and these there’s, the rent reporting is only helping Vantage scores. Okay. So let’s circle back. So FICO nine was saying, we’re going to count rent into the scoring model now.
So it was just really going to be a great opportunity for consumers to really not feel so super overwhelmed with trying to rebuild and repair. But FICO nine is no one’s migrated to that. And they even have now have FICO 10 and the FICO 10 T, which has different requirements and things like that.
And they haven’t migrated to that either. So I don’t really like to go deep into it because people barely understand regular FICO scores that exists now. And then they’re like nine and 10 and 12? And so I like to just briefly talk about, I liked that you asked about FICO 9 because even some credit card companies, as a benefit for being a client or customer, they’ll give you a FICO nine score.
And people are like, well, what is that? And I don’t even know what that is. Should I focus on it? It’s much higher than my other scores. So they get excited and I’m like, no, even though you see it in his grades, no, one’s checking that score. So you still need to focus on the other one.
Brynne: No, definitely, definitely.
And thank you for clearing some of that up for us. Why don’t we just get into Vantage and FICO scores? Uh, let’s talk about a little bit of what the difference between those two are and maybe different situations where you might see them.
Shanté: Absolutely. So at the beginning of this conversation, I broke down the five components of a credit score and I listed them in order of importance, right?
And so Vantage scores, they have six components and they have they are way completely different that I will just say, that’s the simplest way to explain why you could see such a huge difference between the two scores. So I know, you know, credit karma, let’s talk about that. That’s a big one. Everyone sees the commercials.
It’s like get a free score. So everybody loves free 99, right? They don’t want to pay for anything. So they do credit karma, but they come to me or they come in my Facebook group. They say, these are my scores helped me out! And I say, if I can get to that post first, the first thing I say, where did you pull your score from?
And they say Credit Karma. And I’m like, nooooo. And I may put a couple of crying emojis just to kind of, you know, make them laugh a little bit. But I said, they say, well, why is that a score I shouldn’t focus on? And I say, well, they’re calculated much differently than FICO and lenders pull FICO scores when you are applying for credit.
So the thing that hurts my heart is that people don’t realize. They pull their Credit Karma scores. They think they’re, they have a 680, they go apply for something and they say, well, no, actually, bam. Here’s what your real score is. And it says like 605 and they’re like, you know, and you’re like, I don’t understand why is it so different?
That is why. There are several different credit scoring models out here. There’s FICO, there’s vantage. Even each credit bureau has their own scoring model. If you go to trans union’s website and get their scores, you think, oh, because it’s directly from TransUnion, it must be the score I need to focus on, but it’ll tell you powered by and calculated by Vantage.
It’s the same score as this as credit karma. So they’re not trying to trick you. The information is right there. People just don’t know what to, what to look at. So if it doesn’t say FICO, it’s not the scores you should focus on. So you have another one Identity IQ. That’s another one. They actually charge you for vantage scores.
I’m like, you can actually get those for free on Credit Karm. Credit Sesame. I see those commercials. That’s also vantage. So just really be careful and FICO it’ll tell you. It’ll tell you vantage. Vantage may be in small, fine print somewhere. But FICO it’ll be right there in your face. So there’s no secret.
There’s no get the magnifying glass inside to find, you know, what kind of score this is. It’s going to say FICO. And they’ll also tell you which FICO version. So there’s several different credit score models, but there are several versions of FICO. So like I said, FICO 8, FICO 9, FICO 10, FICO auto FICO mortgage, FICO credit cards.
So it’s just really important to know what you’re looking at based on what it is that you’re trying to accomplish. Don’t look at mortgage scores if you’re trying to go buy car.
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Joyce: What do you do now? Where do you get your free credit report? Like where will you send your students or your group to get a legit credit score? ’cause, you know, how sometimes you read something it’ll say here, here! And then that’s not really accurate. So
Shanté: That’s great. Um, so that’s the big thing people say, well, where do I, you know, I need to know what my score is, where can I pull it? There’s places to pull your reports and scores for free.
And there’s places where you pay. Of course you pay, you get better benefits and better, better advantages, but the free stuff, let’s just cover that. So I know I killed credit karma and I kicked Credit Karma in the butt when we were talking earlier. But I do say that you can check Credit Karma for your reports only.
Okay. They’re going to give you a TransUnion report and the Equifax report. Well, that just leaves one more credit bureau because there are three major credit bureaus, Equifax, TransUnion, and Experian. So they’re going to give you TransUnion and Equifax. So now you have to figure out where to pull Experian from.
So, if you go to credit karma, you get those two. If you go to Experian.com/NOW they will give you a free report as well, and a free score, but just from Experian. So when I’m doing my personal one-on-one coaching sessions with my clients, that is where I tell them to pull the information to give me, right.
So I can log into their credit karma. I have the two from there. I log into Experian. I have the one from there. Well, why is it important to check all your reports from all three? Because not everybody reports to all three credit bureaus. This is why also you can have such different scores between the three.
Even if you’re looking at FICO eight, you can have a FICO eight that says 620, one that says 657 and one that says 659. Well, how come they all say different things? Because again, the score comes from the reports and the reports all look different because depending on what you apply for or where they pull your score and who reports, things are going to be different.
So you can get those for free there. Also, annualcreditreport.com This is probably the most comprehensive report I have ever seen, no matter where you pull them from and they do it for free. Pre pandemic, they said, legally, everyone that lives in the U S can get one free report a year. Okay. So if you pulled it in September for the first time, that means every September, you can get a free report.
However, whatever report you pull in September, that’s the info, the last updated information. So if you go look back at that same report in October, that information is not going to change. If you look at it in December. It’s not going to change because they said we’re only giving you what, you know, what you asked for at the time when you put it.
Reports update every month. So that means you need to be having access to something that is going to give you monthly updates. Right? So yes, go pull it from there so you can see any and everything that’s listed, but don’t rely on that for updates. Now that was pre-pandemic. Right now, annual credit report said we are allowing consumers to pull the report for free every week until next April.
So you will see changes on there. Now, lenders update, they typically send updates monthly to the credit reports. So I say looking weekly would just drive you crazy because you’re not really going to see many changes week after week. So I would just say every 30 days, just make it your business to pull your credit reports.
So that’s where you can get them for free. Also, you can get a free score from Discover Card. So if you don’t have a Discover Card, they said, you know what? That’s fine. You can go to creditscorecard.com. We will give every consumer who signs up with us a free Experian FICO 8 score.
If you do have a Discover card, for being a customer, they give you a free TransUnion FICO eight. So that’s two free scores from two different credit bureau that you didn’t have to pay for. If you have Discover and they give you TransUnion, if you don’t, they’ll give you Experian. Again, these are just the scores, not the reports. So that’s where you can get them for free.
Even some of your credit card companies that you’re with. Like Discover, they’ll give it to you. So bank of America will give you the free FICO eight score. Citi card, Navy Federal, Wells Fargo, but here’s the kicker. You have to make sure you’re paying attention to the version they’re giving you. Cause not everybody’s giving you the same thing.
So Citi Card they give me a free Equifax FICO credit card score. So that’s all it’s done for. If someone pulls FICO, Equifax credit card scores. That’s what they’re going to see. Wells Fargo gives FICO nine. So although you say, but it says FICO, Shanté. It’s FICO nine. And we talked about earlier. No, one’s using that.
So even though you may be jumping for joy, when you see the high score, it really means nothing. Navy Federal, if you’re with that credit union, they give you FICO 9. So even though it says FICO just really pay attention to what it says, and then there are companies that give a score, but it’s not FICO. So Capital One is a big one.
People like, but it’s capital one, they’re reputable, reputable company, but they’re giving you vantage scores, just like credit karma. So ignore those. Chase. Chase is a big, big lender, but they also give you vantage. So it’s very important to understand that even though they’re giving you scores, it’s, they’re not all created equal and we need to be educated on the ones we should ignore and the ones we should focus on.
Brynne: Yeah, absolutely. So after you have found your free credit report, how do you go about like, going through that? Like, I feel like you should do it line item by line item, trying to find, like, I don’t know any information that might be fraudulent or erroneous. How should people go about doing that?
Shanté: Oh, there’s two reasons why people should be staying on top of their credit.
Uh, well let me say three, number one, the credit bureaus are for-profit companies and they get paid every time people report to them. So when companies report to them, they put whatever these companies tell them to. They do not care if it’s right or wrong. They’re like, this is what they told me. This is what I’m going to put.
So yes, there are cases where they get things screwed up as you check your report and you’re like, this isn’t mine. Where did this come from? Or this is mine, but the balance is incorrect because I paid a thousand dollars off of this. And you still have that. I owe a thousand, you know, so it’s really critical to check your reports.
Because if no one else is going to pay attention to, if something is correct, you are going to pay attention to whether something’s correct. So yes, you should be checking line by line, every single thing. Um, but a lot of times people, the issue isn’t that they can’t read. Right? It’s like, they don’t know what they’re reading.
They don’t know what means what. They don’t understand what should I focus on when it comes to all of these things that are listed here. Right. And so that’s kind of what I do when I break down things with my clients. They’re like, I can pull that report all day long. I don’t know what to do with the information I see.
Right. So yes. You want to go line by line. Not only to see if things are reporting inaccurately, just to see what is my starting point. So I know which direction to go in with rebuilding and repairing. If Shanté said credit mix is important. Well, I just check my report and I don’t even see any mix of credit.
All I see is one credit card. So that means I need to add an installment line or I had six credit cards and four installment lines. My mix is pretty okay. So I don’t need to add anything else. So it’s really about knowing which direction to go as you’re looking at the information that you’re seeing.
So yes, line by line. I actually have a workbook included in one of my, um, my credit repair books that literally, I mean, it just breaks it down for you. Each page says credit cards. Okay. Well, what, what information about the credit cards should you be writing down? The name of the lender, the date that you opened it.
So, you know how long you’ve had it open. What is your limit? What’s the balance? So we know how much we’re utilizing, right? And then we say, well, how many late payments do I have if I ever had any late payments? When were they because it’s 2021. If you tell me, oh, I’m trying to fight these late payments on 2017.
I’m going to tell you, please leave that alone because it’s really not affecting you much right now, but people see it. And they think I see red Xs all over my report. Depends on when you got them. So there’s so many the things that just go into the rebuilding and repairing process where people don’t know.
And so yes, absolutely line by line, writing down any remarks that you may see any late payments writing down when they work. If you have student loans, are they in default are they in deferment status, you know, because how you handle those are two different ways, right? Auto loans. What is your interest? How much are you paying every month?
Are you paying biweekly or once a month? All of those, what’s your term? Is it a 60 month term or 84 months term which I think is crazy, but people have them out here. It’s really about. Doing a full inspection. When we got our house that man came in here and he inspected things that I didn’t even think mattered, but it was on that paper.
So he checked it and I was like, wow, now I can see how important getting the inspection is. So yes, you want to go line by line and you just want to capture everything that is listed there. So you say, all right, now I know where to start. If you don’t have any medical collections, then guess what? I’m not going to tell you what you do to handle medical collections, but I’m going to tell you how to handle a co somebody a loan co-signed for, for somebody or an authorized user that, you know, you signed up for.
So really it is about knowing exactly where you’re starting and knowing how to navigate through your report.
Brynne: Yeah, absolutely. Absolutely. So let’s talk about, there’s been this new thing, like a new advertising push from Experian, and they have this feature called Experian boost and they, some people think it means that they’re going to get an automatic boost on their credit score.
And that’s not super how things work. I’m wondering if you can educate us a little more about what that is and if people should even be bothering to use it.
Shanté: So oddly enough, people have seen big boost in their scores when it comes to signing up. But let’s talk about this product it’s called Experian Boost, which means it’s affecting one credit score, which is Experian.
So you can boost that all day long. If you’re applying for things and people aren’t checking that score, where does that leave you back in? So I don’t like looking for these quick boosts, right? Overall is what’s important. So I got my Experian score, boosted up 50 points, but my Equifax and TransUnion still sucks.
And guess what? I still don’t know how to even fix those, because I just saw this quick fix on a commercial that said, you can put your cell phone on there, put your utilities. So yes, you can see a boost. This is what I don’t like. They use a third party company to have access to your bank accounts because they want to see that you’re making payments to these people.
Because guess what? Because it’s not credit. It’s just bills that you’re paying on a monthly basis. It’s not going to report on your credit report as someone that you borrowed money from and paid back. So they have to go through this third party to say, well, how else are we going to know that they’re making on-time payments with these things?
We have to check your checking account. If you’re okay with that, then listen, sign up all day long. I’m just here to tell you I’m not comfortable with a third party having access to my bank account sync, everything that I use my money for. So you can look for Netflix and look for AT&T and look for T-Mobile.
Also again, it only boosts Experian. Secondly, thirdly, when lenders pull your credit report, those things do show up on the report as Netflix, as Hulu, as, you know, whatever gas company or whatever. So a lender can see, all right, your score might be great, but it’s only really because of these things that really don’t show me that you can borrow money and pay people back.
So you’re still a risk to me. I don’t care how great it boosted your score because again, it’s not about the score only. It’s about the information on the report because that’s where the score comes from. So it could boost your score, but still be can handicap you because you still can’t make the moves you want to make because the lenders say, I don’t care that your score jumps.
This is like stupid to me because you didn’t borrow money to pay Netflix. You’re not borrowing money from the electric company. So, you know, I wouldn’t say don’t, but I, if you ask me. Specifically and personally, I’m going to say don’t, but I would say if you want to go ahead. And there’s some things I would tell people, if you want to do it and and you want to just feel a little bit of motivation from seeing some increases. Go ahead. If you’re comfortable.
Joyce: I also saw a commercial about, you know, if you buy Netflix that can increase your credit score from them. Which was something else like really?
Uh, I don’t, I don’t think so. Look, when my family members are like, you know, cause they know I have like a lot of, um, money that comes from somewhere. It says here and I’m like, oh, that’s not really how it works.
Shanté: You know, it’s all marketing. It’s all how many people can be. And when people don’t understand, and I like to say the word ignorant, cause that’s what it is when you’re ignorant to credit, companies they capitalize on that, you know?
Like right now, everything’s keto, keto, keto when it comes to diet. So the grocery stores are like, keto everything! And I’m like, you wouldn’t see half of this stuff last year, but they know they see everyone posting about it. So they’re capitalizing and they’re charging an arm and a leg for stuff you can make at home yourself that are keto friendly, but they know that’s the way of the world.
We want fast. We want convenient. I don’t want to make these keto muffins because I can just go to the Safeway and buy them and just have them, you know, the crust or whatever. So it’s just all about people we’re just grasping at whatever’s quick, whatever’s easy. What’s going to get me the biggest benefit, but that doesn’t mean in the long run it’s going to benefit. It’s just benefiting you for right now.
And so that’s why I’m big on educating people. Like I’m teaching you for not just right now, but for long-term. How do you maintain good credit? And I decided built boost it. So, yeah, I’m not a fan, but again, I tell people, take the information and do with it what you will.
Brynne: Now, let’s say that you already have a negative credit history.
Like you’ve already done some stuff to mess up your money. And maybe some of that is totally a personal responsibility thing. Like you just messed up, but maybe some of it is just drawing a bad hand. Maybe you lost a job and all of a sudden couldn’t pay your installment loans. Maybe you had a medical thing come up and you couldn’t repay the debt because you weren’t planning for it or anticipating it.
When that impacts your credit score and your credit report, my understanding is it can make things real hard, like things, everything from finding an apartment, maybe even in some fields, finding a job, finding an affordable loan. So if you are already in that situation, what are some ways that you can rebuild your credit history? When maybe the, I don’t know, like the Cadillac of credit products isn’t available to you?
Shanté: I feel like you’re talking about me right now. Um, that is how I get started doing this in the first place. Uh, I’m 42 years old right now, but when I was 22, I was diagnosed with stage three cancer. Okay. Had to go through chemotherapy, radiation treatments had tons of medical bills and collections. And that’s why that’s when I started to learn about what a credit report and what a score was, because I would get the collection letters to say, we’ve reported this on your credit report.
And I was like, on my what? You know, I’ve never heard that, but I knew what a credit card was because when I was younger, I saw my mom using credit cards. The biggest issue for me was, um, what do you mean? This is on my report and how is it? Is it a bad thing? Is it a good thing? How am I being affected by this?
And so I started looking at where do I pull credit reports? And then I saw other things that were on there, like when I bought my car and like credit cards that I used and didn’t pay back. And I was like, wow, where did this come from? How do I fix this stuff? So I just started researching back then there was no Google. Okay. Yes.
I’m old. So I was on Netscape and I was on Yahoo. Was like, trying to look up, like, how do you fix these things? If I pay it, what happens? How do I boost my score? So that’s where all this knowledge came from like literally from the cancer. Right. And then it was like, all right. They say, you can start with a secured card.
I’m like, okay, what does that mean? You know, how is that different than the card my mom uses where she has to pay everything back at the same time. I was like, I can’t afford to do that. And so just really researching, but it’s all about. I figured out where I was starting. I pulled my reports.
I saw everything collections. I saw this credit cards. Non-paying charges, all that stuff. Then it was, well, what does all this mean? So then I looked that up, then it was, well, how can, what can I do to make it better? Start out with a secured card. Well, what is the secured car? Well, you have to put down some collateral.
You’re going to have to apply for it. And they’re going to say, we’re not going to deny you, but we will accept you, but you have to put down collateral. We’re not comfortable giving you an unsecured card that you can just use at your will. So I got a $300 bank of America credit card, and they said after one year, if you do well, we’ll unsecure you.
And I was like, awesome. But in the meantime I was using it, I was paying on time. So then I started getting capital one offers or get bank. So other credit cards. So I applied and I got approved. And so I just started using those the same way. Bank of America became unsecured was still only $300, but cap one said, we’ll give you one for $750.
I was like seven fifty. Wow. And then $750 became $1250 because they gave me an increase and I got another card. And so I literally just started building in the meantime while I was rebuilding, I was repairing, this is so critical. People don’t do them simultaneously. They just say, I’ve got to repair repair repair.
I just want to get all the bad stuff off. So once you do that or it may never come off, it’s like, well, now what? You have to be rebuilding as well. Lenders don’t want to just see that you don’t have anything negative. They want to see that you have positive payment history. You have positive accounts. So that’s a big misconception.
I know we’re going to talk about that later, but I want to say people think having good credit means nothing negative. I have a client who has zero negative items, her scores are in the 500s. And while I was going through everything I went through, I was able to get my score up to about 742 at one point in my life.
But I had 15 late payments on there. I had three collections on there and people say, well, how is it that you had those negative things? And your score was still great because all the positive that I built ended up countering that negative. And so that is what’s critical if you have nothing but mostly negative in your one little measly credit card that you just got to rebuild, it’s, you’re going to look less favorable than someone with a lot of negative, but a lot more positive.
So that’s the big, the big factor, right? So yes, I was dealt a bad hand. Cancer hit me, divorce, hit me, homelessness hit me, autism hit me. And it was, I mean, I w then I lost my job. I didn’t even talk about that. And so I was fired. Unjustly, had a fight for my unemployment, and I didn’t have saving. So I know we’re talking about credit, but let me just throw this bug in your guys’ ear.
I knew better. And I still ended up in a rut. Because I had no savings. I had a great job and because I made good money, I never saved because I said, if I want something, I can just go out and buy it. I don’t need to save money. Until I didn’t have the money. So I racked up $55,000 to $60,000 in credit card debt to just stay afloat, to pay the car, to pay insurance to pay for groceries to pay for gas.
And so my learning experience was don’t you ever not have a savings account at least six months to a year worth of your expenses. So if something happens, you know, you’re covered. That was a hard lesson for me. And it took me seven to eight years to finally pay all of that debt off. So I say that to say as well, too, if you’re looking for the microwave, fix that, ain’t it.
But eventually, the fix comes. Eventually your goals are met because the time is going to pass. Whether you do something with the time or not. So I could have said, oh, it’s going to take me eight years to pay this off. Well, eight years passed anyway. So eight years with the debt? Or eight years debt free? So it’s tough to pay off all that much money.
Cause I was throwing $5,000 at a time on a card, you know, $2,000, $8,000, my last card, I paid $14,000 all up front and I wanted to cry for good reason that there, because it was like to give all that money away at one time, but I was like, it’s not my money. And I had to realize that it’s their money. I borrowed money to pay for things.
So pay them people and be done with it. So I did it. So I have no credit card debt right now, but it took a long time. For some people, doesn’t take a long time, depending on what your starting point is. If you have nine collections 18, you know, credit cards are maxed out in a hundred late payments at $5,000 increase, it’s going to take you longer than someone that’s like, I just got a couple of things on it.
I just really need to work on rebuilding. So when people say, well, how long is it gonna take me to fix my credit? Depends on what your starting point is. And depends on if you’re actually going to do the work that I tell you. Right. You can say, Hey GPS, I’m trying to get here. It can give you all the routes to go.
You can decide, you know what? I’m going to go the way I want to go. I’m not gonna follow this GPS. Well, guess what? You might still get there, but it might take you a long time with the GPS and said, I told you in 42 minutes, you can get here, you wanted to take an hour a half because you wanted to make a left.
When I say make a right. I told you, you make a u turn. If you wanted to take this detour, follow the. So that’s why people do sign up with me because they’re like, I’m reading your group. I’m reading all over the internet and I’m trying to piece it together. But if you can just give me a map based on where I’m starting and where I want to go, I want to follow exactly what you tell me to do.
And that’s where my coaching sessions come in.
Brynne: Looking at kind of like you’re talking about like, people want quick fixes, right? So if you find yourself in credit card debt, especially now, I feel like with the internet and like all of these sites, save these cookies and know our life problems and want to advertise to us.
And they do so successfully. Sometimes. I’m wondering people might be seeing if they’re in a bad spot with their credit, they might be seeing offers from places like debt settlement companies. And then on another side, completely different service, credit counselors. What are these services? Should people stay the heck away?
How should, how should people interact with these services if they choose to do so at all?
Shanté: So, yeah. Um, and I want to add credit repair companies “repair” companies. And I did air quotes for a reason, and I’m gonna start with, I’ll start with the other ones now in credit repair. So credit counseling, you can call yourself whatever you want.
Credit educator, counselor, coach, as long as you are counseling people, which means they’re coming to you with a problem. And you’re telling them what they need to do to fix it, different measures they need to take different interventions. Why they should take these measures because the why is way more important than the what I can’t give you a whole roadmap of what to do if you don’t understand why I’m telling you to do it I’ve done you a disservice, right? If you are going to legit credit counselors with people who are well-versed in credit, because there are people out here that say they fix credit and they coach credit and they are giving all of the wrong information. I see it all the time on Instagram.
I see it everywhere where people say, look at my client. I help them boost their score 50 points in just 30 days. But what screenshot did they post? Credit Karma. And I’m like, you call yourself a credit expert and you’re posting Credit Karma scores. And then what are the comments look like? Whew, help me, help me, help me because they don’t understand that credit karma is crazy because the person who is the expert say, well, credit karma is great.
So it is difficult right now because everybody and their grandma says that they fix credit and they don’t know what they’re doing. So vet the people that you are hiring and it, that’s kind of hard to do when you don’t know the information yourself. So you’re like, vet them how? I guess they’re giving the right information because they’re experts, they got tons of clients.
So it’s really hard in this industry. Even for me to try to rewire people’s brains and try to change their psyche or kill all the misconceptions or kill the Lexington Law. I’m sorry, I’m gonna put names out here. They do credit repair, right? So pay us $99 a month and we’ll fix your credit. We’ll get rid of the bankruptcies, the student loans, the collection.
So if you type credit repair in Google and click images, every flyer is done to say the same thing. We get rid of all the bad stuff, because people think if nothing there is bad, then I’m going to have good credit. So then people come to me or my group and say, I did hire a company and they got all my collections off, but my score still sucks.
Did they teach you what to do to build your good correct? No, because you’re not talking to anyone. You’re paying them monthly. They’re just writing dispute letters, hoping things fall off because you think that’s going to be the key to good credit. And they’re getting rich, you’re poorer. You could have taken that money and actually paid some of the debts that you owe, but you think getting rid of them is going to make you have good credit.
That is one reason why I say stay away from credit reapir companies. Another reason is that they don’t educate you. So you just walk away with no knowledge, just fingers crossed, hoping that things fall off. So you wasted. Sometimes I hear it in my inbox between $700 and $4,000 I’ve heard that people have wasted money with credit repair companies, or their friend who said, I can fix your credit girl, just pay me $900, pay me twelve hundred dollars.
And they’re like check written! Because you’re telling me if I just do this, you can give me good credit. Tell, say no more. Help me. Right? So that, or, and this task happens to be one of the misconceptions, they think if I have nothing negative on there and you get rid of a collection, then the debt is gone, right?
People think there’s correlation between something reporting and something being owed. So someone came to my group and said, I paid a company for, I don’t know, about nine months. They did get some collections off, but then I got sued and they garnished my wages because I thought if it’s not reporting, Yay! I don’t owe you! Like, no, it just means it’s not reporting.
So that saddens me so that now they were taking your money from your check and you had no control over that just because you weren’t informed. Right? Because they weren’t here to teach you. They want to just take your money. They know you’re ignorant and they say, Hey, let’s make all the money we can. And you don’t even know what they’re saying in those letters, because they’re not sending them to you for you to send.
They’re just mailing them off. And you’re like, well I’m paying the experts to do what they’re going to do. You don’t know what they’re writing. You don’t know what they’re saying. You’re just like, please, please, please get rid of my bad stuff. That’s another reason why and anything that comes off your report can be put right back on.
So I do have the story of the woman who said 11 of my collections were deleted and nine of them came back. I said, oh, that’s interesting. Did you get a refund? She’s like, no, I’m like, of course she didn’t. Cause they’re like me at our part, whether it came back or not, I said, well, let me ask you, did they tell you what you could do in that case?
She said, I didn’t know there was something I could do. I said, exactly, they’re not educating you. So you’re walking away with no knowledge and nor growth. And then the credit, most times not fixed. Right? So I would say stay away from credit repair companies unless, they’re going to educate you on the ins and outs of how credit works.
Debt settlement companies. You have tons of credit card debt you’re in over your head. You’re making payments. You’re not making headway. The interest is high. I don’t know what to do. I feel like I’m at a loss. So these credit debt, settlement companies say, you sign up with us. We would negotiate. We will lower your monthly payments.
You pay us and we’ll pay everybody. You didn’t have to worry about it. You mail us one check we’ll disperse, everything. Well, let me tell you, in order for them to negotiate on your behalf, you have to have the negative accounts. So what they tell you to do is default on everything, because that’s how we can get you the best negotiation.
So you had good credit, just high balances, but now you default in all things. So now you’ve made your credit worse. Okay? Here’s the second thing. Well, they have to get paid as well. So this one lump sum that you’re paying them to divvy out, they’re taking their money first and then divvying out your money. So you’re paying them to do what you can do yourself.
Here’s what you can do. Every credit card company has hardship programs. You just need to call them. The companies don’t know you have hardships, unless you call it to say I have hardships. But the biggest thing is people don’t want to face their bad credit, right? But you’re not looking at it. It’s not going to make it go away.
Alright. You not letting them know you need help is not going to get your help. They’re not going to call you. Hey, girl, how you doing over there with your debt? You need some help? No they’re not. So you have to say, I need help. Do you have any assistance programs or hardship programs? Well, yes we do. If you qualify, what we’ll do is lower your monthly payments, lower your interest.
We will close your card. Because we don’t want to help you pay down your debt if you’re running it back up. But you can always rebuild your credit. So they have to close your card, close it out. You did bad with it in the first place. Start from scratch because the credit cards you can always rebuild. Once you default on the card that wasn’t negative.
Now you may have had them paid off, but now you have negative things on your credit report that you didn’t need to have. Right? So I don’t know. I don’t suggest that settlement companies at all, because they take their cut. They want you to default first, and it’s a slow drag. You’re paying them all this money and they’re taking part of it.
And then divvying it out when you can take all of that money and pay the people, but just call the companies directly. That’s like my biggest thing, but this is information that people don’t know, which is why I love to educate.
Brynne: Definitely, definitely.
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Brynne: And kind of along those lines, if you’ve gotten to a point where things are really bad, some people might start thinking like, oh my God, maybe I should just file bankruptcy. And that’s not a there’s different types of bankruptcy. It does affect your credit a lot. Maybe there are some situations where it’s a good idea, but I feel like there’s a lot where you can kind of work through things and fix things for the better too.
I’m wondering if you might be able to like give us some examples of times when maybe bankruptcy is actually a good idea, how it impacts your credit long-term and how to kind of make that decision?
Shanté: So I, I hate this conversation – not with you guys – with people who are considering it because they think that is just the quickest way to just wipe the slate clean, just start over and just, I don’t want to go through the work is too much I’m overwhelmed. So people do it for different reasons. The people who are like I am overwhelmed. It’s too much for me to handle. I don’t want to deal with it. I just want to wipe them away. Those are the people end up filing twice.
I have a client who’s filed twice because you didn’t learn anything from it. You just wanted to start from scratch. Right. And just have a clean slate. There are people who actually say, well, my spouse passed away. He was the bread winner. I lost my job. I’m in one of those states that say, if that was his debt, now it’s your debt.
I have children. So those people I’m like, you know what? For your sanity level, let’s go ahead. Because if you don’t have the funds, you’re going to find yourself in a worse situation as the years go by. So let’s go ahead and figure out what we can do. The people who run up a lot of credit card debt. So they were overspenders or they’re shopaholics, or I shop when I’m stressed or I’m, you know, that’s my retail therapy or, you know, I was young and dumb.
Okay. Well now you’re older and trying to be smarter. Let’s learn what to do. Don’t look for the quick fix. Beccause. Yeah, there’s some people in my group that say I’m thinking about filing, but I don’t know, is it bad? Some people say it was the best decision I ever made and that could be possible. It could be for your level of sanity, you were like, I have to do something or I’m just going to jump off a bridge, you know, or whatever.
But it’s not the first course of action. It’s not sort of, it’s not for laziness. You don’t want to learn and do the work it’s not for people who have money, but you mismanage it. So you think you live check, the check. No, you really don’t. You don’t budget your money because you spend it on fast food or whatever, and you’re not paying attention.
So I always liked to go to the, you know, let’s talk about why you’re in this position. Like, how did you get here first? Let’s talk about that, because that makes me that determines which way you need to go. And if it’s all about, I was just making dumb decisions. Don’t then you’ll feel much better about yourself saying, you know what?
I took some time to say, you know what, you did this to yourself, own up to it, accountability, learn it, pull yourself out. But for the people who say, you know what, I’m not going to make it in life if I don’t do this, I won’t say don’t. If it drags you to that point, I wouldn’t say don’t but you still have to qualify.
So it’s not like the poor young girl came in our group saying she has $4,600 in debt and she wanted to file bankruptcy. We were like, oh, you poor baby. If you don’t go somewhere, sit down and figure out how to budget and pay that debt off. But she thought $4,600 was like, nah, we’re not, people have $50,000 in debt, you know?
So, you know, but that’s because she thought, I don’t know what to do. I mismanaged my money. I just want to clean things. We’re like, you’re not going to get approved for bankruptcy for, with less than $5,000. So it’s really about also understanding what is for you and what it’s not for you, bankruptcy is not always the answer.
Even if you qualify and bankruptcy is sometimes the answer, but you don’t qualify. So it depends. So let’s talk about chapter 13, right? Chapter 13 is designed for consumers who say I have regular income and I can pay back a portion of these debts. I’m not trying to have a clean slate. I’m not trying to get out of pain.
I can do that. So it’s a five-year plan. You meet with the trustee and they come up with a plan to get the debts paid off. Right. So you’re not paying everything back. It’s the percentage that is split up over years. And so it’s a five-year plan. So you’re not even discharged until after five years. So, um, but it lasts on your report for only seven years.
So it’s better because it doesn’t affect you as long, but. And it’s easier to qualify for, but they come up with your qualifications based on your expenses, the type of debts you owe and your income. If you have non-dischargeable debts, like student loans or child support and stuff like that, then that’s for you as well.
If you want, you have a house or a car, do you want to keep the property? There’s a way to do that with chapter 13, chapter seven is the one that people really want. Cause it’s basically saying everything’s clear. You’re good to go, but it’s much harder to qualify for, um, there times where you don’t, you know, you don’t have a choice where that can keep my car and keep my house.
It’s you’re saying I can’t manage these debtss. I’m releasing it to the government and I’m starting over. Yeah. You don’t get a choice, like yeah, keep this, but keep that you can’t have your cake and eat it too. If you want the thing, that’s going to be the most favorable option, right? This one works well for people that really have low income or no income, right.
Uh, or no assets. Let’s see, oh, that stays for 10 years on your credit report. So even though it’s not a five-year plan and was discharged pretty rapidly because you’re just getting rid of everything, it stays for 10 years. That’s a really bad stain on your credit. What I will say. And if you don’t qualify for seven, then 13 would probably be the best bet for you. But I will say, don’t think that it is a death sentence, right?
I’m never going to ever have good credit again if I filed. People have bought homes two years after filing bankruptcy, people have been able to rebuild their credit. And one thing I can say about FICO, and I meant to say this when we were talking about scores earlier, one benefit is that FICO says, you know what?
We know things happen and we know negative marks show up, but we will tell you that the older that they are, the less weight they hold, because time will be passing. And the idea is that as time passes and those are aging and wiegh less, that you’re building more and more. So that’s another thing with me where I said I had that 742 with 15 late marks and three collections because they were aging.
But then in the meantime, I was building so much, so people pull my report and can see those negative marks, but they were like, we don’t even care about those little things. Look at what she’s been able to do in between the time. And that’s why I say it’s important to repair rebuild simultaneously so they can see I’m trying to make better moves while I’m fixing these things.
So that’s the idea. So that’s like, you wouldn’t, you would not, you wouldn’t not move into the house you desire because of negative things called up on the inspection. You’re going to move in and then fix the thing. So right now I was like, I want to wait and fix all these things before I move in, no, you close, you get that house and then you fix everything.
And so it’s the same way with credit. Pull it and inspect it when needs to be worked on rebuild while you’re repairing. But again, bankruptcy is not a death sentence, but it’s also not the first course of action that you should take, because you’re like, eh, I don’t want to deal with this because you haven’t changed your mindset.
That means you have this mentality that I can run up debt. They’ll get their money when they get it. Oh, I’m in a bind. I can’t pay. I’m going to wipe my slate clean. You’re going to end up right back in the same position because you haven’t learned how to rewire your brain and be disciplined and look at how you got here in the first place.
It’s really about a mindset shift, um, back in April, which is, uh, financial literacy month and autism awareness month. Um, I did a five day credit challenge and I know on day one, they want us to just start, get to the meat and potatoes, but say it was like, okay, talk to me about these connections and how to boost my score.
I said, no day one is about money mindset. Before you learn anything else that’s talked about. Why you think about money, the way you do, why you pay people back the way you do, why you think you don’t have to pay people back? Why don’t you spend the way you do is because growing up you didn’t have, so you say, when I be talking about don’t get some money, I will buy what I want, despite whether I can afford it or not.
Or I didn’t have growing up, so I don’t want my kids to be without either. So I buy them whatever they want. Cause I don’t want them to be struggling kids like I was. That’s not the way because you’re teaching them the same thing and they’re going to pass that to their kids and their kids. So why do we think the way we think. Me, I’m the opposite.
I was the struggling kid and I didn’t have. So I’m afraid to spend money now. Like I stopped and my husband has to be like, Babe, you need it. And I’m like, but it costs!!! He’s like, you have the money. It’s like, I’m holding on because I don’t ever want to be back in that position again. So that’s also not a healthy mentality to have, and I’m being very transparent and I’m working through that, you know, or people addicted to sales.
I know people that just spend hours in the hall browsing the clearance racks and sale racks and they’re using credit cards. And I said, well, if you’re not paying back in full, when it’s due, did you really catch a sale? Because you’re paying interest. So now you probably paid the regular price or more than the regular price, by the time you paid off the credit card.
So it’s really about the mindset. Like I can’t even express that enough out of everything we discussed today, we have to circle back to get your mind right first. Because you have to want this bad enough to say I’m going to make some changes, not let me just learn this information to fix my credit, because you’re going to end up in the same situation.
Some people don’t like to hear it, I’m going to make these major changes. Well, that’s fine. Talk to me next year when you’re like, Hey Shanté, say I’m still in the same boat. I’m like, yeah, we talked a year ago and you told me you needed help. And you never moved forward. I had four people reach out to me this week that said, I’m ready now, Shanté my credit stuff.
And I scrolled all the way to our first of conversation, January. It is now September. One lady, November 2019. She commented on one of my posts. I’m ready for my house. I said, you reached out to me almost two years ago. You never followed up. So she inboxed me. I’m ready now. I’m like, we’ll see. So I can’t want it more for you than you want it for yourself.
Brynne: For sure. And that’s another thing I think too, like when you’re rebuilding that credit, like that rebuilding process takes time too. Like, it’s not just like a magic wand that you wave and it’s like magically everything’s fixed in one day. Like you might need two years to rebuild your credit, to get to a point where you qualify for a rate on a mortgage that you like.
Joyce: Also in the media or influencers. When you see, I pay X amount of money in six months or like this, when I tell them my story, they’re like, well, it’s not realistic. It was realistic to me. It took me years to pay off my debt, you know? Cause I did it both ways, but from experience they want easy, fast, and they don’t want to work for it. They just want it easy and fast.
And I, and I agree, I’m sitting here. I’m like, where have you been Shanté?
I needed you like 10 years ago. My twenties, too. I was like, here, here, I needed to have my Jordans. I need it. And I was a single mom, too. And it was when I hit rock bottom. That’s when I started.
Shanté: It’s disheartening because, you know, I could be frustrated with my mom. Why didn’t she teach me about money? Why didn’t she take me about credit?
And I’m like, can you see somebody, something that you don’t know either? So I didn’t really come down on her. What she did teach me was how to shop around for the best price. I remember being nine years old. I wanted a pair of K Swiss so bad. They just came out I said Mom everybody at school has a pair.
Can I have a pair too? She was like, okay, well, we’re not going to just go and buy them. You need to call around and find who has them the cheapest. Now there was no internet in 1988. So I had the yellow pages and I just went to like shoe stores, local retail and I’m looking. And I, I lived in DC, Northeast DC at the time. So I’m looking at all those two stores and their mates and I would just call them, they call us, hi, I’m looking for a white pair of K Swiss, size four, um, high top. How much?
$54 99. I wrote it down. Called the next store called the next store. So I finally found some that were like $45. And I was like, wow, this is like cheaper. And I told my mom and she said, Now do you see why you don’t just go into the first store and buy it? So when I say from nine to 42, and that is stuck in my brain, I will look up a coupon code.
I will find a free shipping code. I’m like, I am not paying full price or just paying for the first thing that I saw. Right. So that’s the money conversation we had, but nothing else. And so I appreciate her for that, but I made these flash cards years ago called the fundamentals of finance, making sense of money.
And it’s for kids because they hear us talk about budget, economy, taxes, credit score. They’re like, I don’t know what any of that means, but they need to start learning what that means. Cause I used to hear my mom say all the time, oh, I got bad credit. You know, talking to her girlfriend. And I’m like, I don’t know what credit is.
I know it’s bad. You know, because she just kept saying bad credit, bad credit. Then I learned the hard way. Let’s not let these kids learn the hard way. Not the story of when I was 18 and I made dumb mistakes and now thirty. I’m like, what have you been doing since 18 to 30? Like, you haven’t learned anything what’s going on, but no one’s teaching it.
Schools aren’t teaching it, colleges aren’t teaching it. And so I made this. And then I said, all right, all these kids are graduating. They’re about to hit college and they’re going to go on campus. And they’re going to say, would you like to get a free mug? Sign up for this Discover Card! I’m like, no, no, no, no, no. Let me teach you now.
So I made this it’s all about credit building and how it paid interest because a lot of those kids also get cars and they see 14% interest. They’re like, whatever, I just need a car. And then they say, dang, that was a lot of money. I paid triple for this car in the end because my interest was so high. I’m teaching them how to calculate interest.
I’m teaching them how to calculate what their monthly payment could be. I’m giving them the formula. I’m teaching them about the credit bureaus, credit scores and everything we talked about today in this for teens and young adults, because nobody’s teaching it.
Brynne: Yeah, it’s one of those things you just assume, like when I’m a grownup, I’ll just like, know all this stuff and it’s like, how are you going to know it?
Unless you actively go out and try to learn it. That’s like, that’s one thing that I kind of have a question about is our audience is moms, right? So we’ve all got kids. Maybe some of them are approaching age with majority where like, they’re going to want to be able to have good credit or a good loan. Is credit something that we should work on building with our teens in their teenage years?
Or is that something we should kind of just wait until they’re a little bit older. Should parents be proactively doing that part of the equation? Or should they just really be focusing on teaching the basics?
Shanté: I think for young kids, you just need to talk about earning money, spending money, saving money, because kids get money.
When they’re young, they get birthday money, they get allowance and stuff like that. So it’s like, let’s start giving kids the responsibilities that we weren’t able to learn. And that hit us in the face where we became young adults, right. And teenagers. So kids may not have jobs, but they still get some type of money.
And so teach them. Don’t spend everything start saving. Let me teach you about saving. Cause as a kid, you’re like soon as I get money, my mom gave me money to go to the ice cream store. $5 went a long way when I was young and I wanted some chips, the chips were 50 cents. I paid my $5. I got my change back. What did I do?
Okay. Now what can I get with this? And then I got a pickle and I was like, now what can I get with this? And I got some candy. It was like, I spent all the $5. And it was like, why? Because you could have bought your chips, Hey, a $4 and 50 cents. And then the next week my mom gave you $5. Now you have $9.50, but we don’t think what the end we think right now I wanted to blow the whole $5.
So it’s teaching kids, delayed gratification. Did you know you keep asking mommy for this PlayStation game. Okay. And you say you want it and you wouldn’t mind having it for Christmas, but you can have it sooner. If you take the money that you get every month from your allowance and save it, save it, save it. Think with the end in mind, if you spend it on your friends or go buy candy, that is going to prolong your getting that game you want.
So it’s like, that’s the conversation we should be having with the young kids, um, giving them their own, um, debit cards, give them autonomy. We always say we want kids to have responsibilities, but we never give them responsibilites. Like when do they learn? If you don’t give it to them.
Brynne: That is huge. Like just doing those things, like hands on every day and just practicing that while they’re in your care still, and you are still there to provide them with advice.
Whereas just sending them off into the world, like good luck. And they might not feel comfortable coming back home. If they’ve never talked to you about that before, if we’re talking about specifically building credit for kids, is that something that parents should worry about or is that something that’s just kind of like, let them do it when they’re like help them with it when they’re 18, you don’t really need to worry about it when they’re a minor.
Um, I’ve seen like mixed opinions on this and I’m just not sure what the right way to go about it is.
Shanté: There’s really no right or wrong, but there definitely a lot of mixed opinions. Um, some credit cards companies allow you to add, uh, kids as authorized users. And what that means is they are authorized to use it, but that don’t mean they have to.
So that means you put them on your account as an authorized user. Any information about that account is going to go on their credit. So nol whole credit. So people say, well, I have bad credit, but if I add them as the authorized user, is it going to mess up their credit? I’m like, remember it’s only what’s on their report.
So if you add them to this card, only that card’s information is going to be added to that report. Not your whole entire credit history. So some credit card companies have a minimum age and some don’t. So there are people add their kids at age five, and I’m like, I think that’s a bit ridiculous, but you know, I would say getting closer to that age where they’re going to be stepping out on their own 15, 16, 17, go ahead and add them.
Don’t add them if you have late payments. Don’t add them if you’re not using the card properly, because that’s going to do nothing but set them up for failure. Then as soon as they turn 18, before they get a credit card, they should already understand how they should be using credit before you give it to them.
What happens is we get credit cards and then we’re trying to learn how to use them. No, they should understand how to use them, how they work, understanding the billing cycles, the due dates, the utilization, all of those things that matter. Growing up my first credit card, I didn’t know anything about utilization.
I just was like, I’m gonna use as much as they gave me. As long as I pay back on time. That’s what matters. So I’m like, oh, I shouldn’t max it out? Okay. I’m sorry. I didn’t know that because no one taught me. So yes, I would say as kids go ahead and start them, but make sure you’re learning so that you could teach them properly what to do when they get credit cards. Cause what we don’t want is them to get credit cards and look at it as free money. Look at is as, you know, I can just swipe for stuff that, you know, I’ll pay them later or whatever. And if I don’t have it this month, they’ll get it. When they get it, they don’t know a late mark is going on their credit report because of that.
And people can lose 20, 30, 50 points from one late mark I’ve been there. So it’s really all about learning before you make those moves. But yeah, I don’t think you need to be adding a 12 year old to your account. Can you? Yes, but I don’t think it’s necessary. So yeah, I had mixed opinions, but there’s really no right or wrong way if that’s what you want to do.
Great. Because it does help them when they do turn 18 and they finally can check their FICO score one generated. They already have the credit because they have that history. But on the report it shows as authorized users. So a lender can pull that and go, we know that’s not yours. So you should be using that as a stepping stone to start building your own credit.
So don’t just rely on adding yourself to all mommy, daddy stuff and thinking I’m going to be okay because you may have a great score, but you don’t have a healthy profile.
Brynne: Definitely. Definitely. Let’s talk about what are some of the most common myths and misconceptions people have about credit scores? Because those can be really damaging.
If you’re operating on the wrong information, you’re not going to get the right result.
Shanté: Yeah, very, very that’s what I was saying. You got to clear up the misconceptions and stuff before we can start helping you with your credit. Cause you got to get all of that out of your brain. Cause I hear the, I thought I always heard, um, I have a whole book called credit myths and misconceptions..
If I was able to write the book on just that there’s a lot. Now I still call it the most common, common, common, common ones, because we don’t have time to go through the whole book. But yes, I will say checking your own scores will hurt your credit. People think that because they know that when you apply for something and they check there’s an inquiry, you may take a hit, but you can check your own scores every single day.
Please don’t check it every day. You can drive yourself crazy, but you can check every day and it’s not going to hurt you. You can pull them as many times as you want.
Paying on a, a negative debt will restart the timeframe that it stays on your report. That is the that’s probably the first misconception.
People say don’t pay that collection cause it’s going to be on for another seven years. I say no. The reporting period for, for negative items besides chapter seven, bankruptcy is seven years and it doesn’t matter what activity happens. It falls off in seven years. That’s a big one that people think.
Brynne: With that one, I have a really quick question.
I think that probably that misconception comes from like the statute of limitations on debts in different states. So I know that it’ll come off my credit report and it won’t necessarily affect my credit report, but if I owe somebody money and I didn’t know about the debt for, in Pennsylvania here, it’s four years on medical debt.
And so if they come at me after four years, like at the end of that four year period, and I pay on it, then that restarts the legal collection period where they’re allowed to legally come after my money. But that doesn’t mean that my credit report is affected. That’s my understanding of it. Is that totally off base?
Shanté: No, not totally. So that’s one of the misconceptions that the, they think the reporting period and the statute of limitations are the same thing. Right? And so the statute of limitations is what you said, the timeframe they have to legally pursue them for the deabts. That can be shorter than the seven year period I’m in Maryland.
Our statute of limitations is three years. That means after three years have expired, yes, I still owe the debt. Yes, it’s still reporting because seven years hasn’t passed, but they can’t Sue for it. Right. And once it expires, it cannot restart. Now, there are things that can restart the statute of limitations while you’re in, still in the timeframe.
They’re like seven things that you can do that could possibly restart it, but the seven year reporting period, it doesn’t restart. The statute of limitations and the reporting period are not the same thing. There’s something called a zombie debts where it’s been more than seven years. It’s not reporting.
They can’t come after you legally because the Sol has expired. Yes. You still owe it. But some people look at that, like, you know what, I’m going to turn a blind eye because it’s not on my report and you can’t sue me. And I tell people you know what? You haven’t heard from me, but yes, do that. Like, I’m all about taking care of your responsibilities.
But if it’s a zombie debt that stresses you out and you have other debts that you could focus in on paying, that’s affecting you leave that alone. But I don’t like to tell people that, cause it sounds like she’s saying, I don’t have to pay my debt. I’m like, no, I didn’t say that. That’s kind of like, that’s what it is.
So yes, the Sol is the time for they to have to sue you that can restart, but it can’t after it has already expired. So like you said, if I, if I’m at the end of that four year, if you’re at the end of it, but it hasn’t expired. Yes. Paying on that is creating activity and it can restart. Now it’s up to them whether they want to restart it, they can say, you know, I don’t care, whatever. Or they can say, oh, that’s another four years now of us being able to come after you, legally. Once it’s off. And once it expires, they can’t restart. So if I three years have passed, I paid on it. They don’t open it back up for another three years.
I’ve been able to sue me legally, like I’m paying, you know? So, so that’s one of the things that’s a misconception.
Brynne: Thank you. Thank you. Cause that’s, that’s a really good point. I never thought about that. That like you might mix up your credit report and your legal liability are not the same thing.
They’re not measured it the same way. It’s totally – they’re two separate things to worry about.
Shanté: Not even the legal liability. You’ll see, just like the guy, he paid the company who got collections off and he thought, oh, I don’t owe, and I’m like, just because it’s not reporting doesn’t mean that you don’t owe. There are people who don’t report. Full transparency.
Uh, I got a ticket in D C some years back and I got the letter in the mail. Cause I said, I’m gonna pay you when I pay you, whatever you get on my nerves I did stop at the red light. I did. And, um, and so I got a ticket and I was like, whatever. And then I got a collection letter and I was like, you can’t be the credit girl.
And now, you have a collection on your credit report. But when I ran the check, it wasn’t on any of my reports. I checked the next month. It wasn’t on any of my reports. I tell people, people can report to all three credit bureaus. They can report to one or two and they can report to none. Does that mean you don’t owe because they chose not to report? No. So it’s the same thing as something did report and it came off.
That doesn’t mean now the debt is gone. It’s just not on your report. So just like your legal liability has nothing to do with reporting. You owing them has nothing to do with the ways it’s being reported. And that’s a big, that’s a big one because that’s why people pay these companies, all this money to get things off because they’re like, I don’t want to pay them.
I’m like, no, you still owe them. Now you could be lucky. It can come off. And the company never comes back to you again. Great. But if they do they’re well within their right to do so.
Paying off a conviction, increase your scores. That’s a big one.
Dispute everything. When people are trying to rebuild their credit, they just like dispute everything on your credit report and start over.
They ended up disputing things that were actually helping them. So let’s just say you have a student loan or a car note. You paid it for five years. It’s paid off. You have great positive payment history. It shows closed and paid in full. It’s done. So now you just going to now have that positive history, just aging and aging, all your reports, but people think it’s closed, it needs to go.
So they think only your credit report should have opened an active accounts. And I say, no, it’s a history of how you’ve managed credit. I want somebody to see for years, I’ve been able to manage credit. Not I look like a newbie because I got rid of all those closed accounts. And now everything that’s open is just open a year ago.
You got rid of all of that history. And remember that the credit history is one of the components of high scoring. And so a lot of people think just dispute it at all. That’s a big misconception.
And last one, if you pay it, you don’t have to pay collection agency because your original contract wasn’t with them.
It was with the original creditor. So capital one decided to sell it to enhance recoveries. Don’t pay them because you don’t have a contract with them. I say you don’t have to have a contract with them. Guess who does have the contract with them? Capitol one. And guess what when you sign on the terms and conditions that nobody reads, cause it’s like 18 pages long, it was just like scroll down to click accept.
Cause we want the credit card. It says you have the right to sell your debts to a third party if you default. So, no, you don’t have to have enhanced recovery. Doesn’t have to know who you are. Capital one knows, and you didn’t pay them and they’re going to recoup their money somehow. So they sell the debt to a third party and then they got somebody and now you owe a third party.
So this, this concept of your contract wasn’t with them. I’m like, okay, go ahead and think that. And then they’d come back to me. Like I got a summons to go to court! I’m like, well, you said you didn’t have to pay them. So it’s really clear enough. And I’ve really wanted to touch on it because I see this meme going around every year and it’s shared hundreds and thousands of times, and I read the comments and people think that this person who is a credit expert said, don’t pay this collection.
Cause you don’t have to. And people go great, because I have tons! And I don’t want to pay!
All I can do is give you the real deal. I’m not here to discourage you, but I’m here to. I don’t want you to be blindsided when something happens and you believe some misconception that you read in some group or some credit expert on Instagram said it.
Brynne: Oh, for sure. And those are all super important ones. Some of those misconceptions or once I’ve had myself in the past before I learned more and some of them are ones, like you said that I still see people out there like tweeting or liking or resharing.
And it’s like, what? No stop, stop.
Joyce: You know, I have a blog and it’s mostly money and the community and you know, I’m a Latina. So I always get credit is not important credit because some guru said that we don’t need credit to buy a house. What did you say about like, like that drives me insane. Like I’m like, do they know the importance?
We didn’t cover the importance of having good credit score. Like, do they, what do you say to your students and to your community about that? Because every time you mentioned that you always get, someone said, well, so, and so said, we really don’t need any credit score. And you’re just like, what?
Shanté: I think the issue with that, we use terminology and we really don’t think about what we’re saying, right?
It’s just a lot of jargon. I’m going to buy a house. You’re not buying the house. Guess who’s buying it for you and you’re paying them back? The bank. So would a bank buy you a $300, 00, $400,000 house. If they can’t see how well you manage paying other people back? I would not. So here’s the, what I love to say. And next time you, they say this, you tell them this story, but I want you to use their names.
Okay? You got Joyce, you got Shanté and say, you got Chris. Chris is my husband. We’re going to just do something. Right. So me and Chris and Joyce, we all went to college together. We’re all great friends. Joyce comes to me and says, Hey, Shanté, um, I’m just a little short, you know, this week I gotta get to work.
I don’t have any gas. Can I borrow $20 from you? I’m like, yeah, girl. You say, I’ll get it back to you next Friday. Next Friday comes here. Here’s that $20. I’m like, okay, girl, thank you. Two months later. Oh, you know my kids, you know, they need lunch or snacks for the week. You have a quick $200, like I get paid the two weeks next Thursday on the 15th.
I got you on it. I gave it to you. You pay it back. I never have to hound you for it. I don’t have to call you for it, text you. You you’re just like, here you go. Thank you. You’re giving me the money back. When you said you would, Chris comes. Now one day you come to me and say, Shanté, do you know Chris borrowed a hundred dollars from me three months ago.
I keep calling him. I’m hounding him. He sends me straight to voicemail. Or if he does answer, he has some excuse about why he doesn’t have it this week. So you say, I’m never giving Chris another dime. Now Chris has never borrowed money from me, but you just told me how he was with you. So when Chris comes to me and says, Hey Shanté, Ooh boy, this has been a tough week. You got $20 I could borrow?
What am I going to say? Yes or no. Heck, no. Because Joyce told me how irresponsible you were with money. So why would I take a chance on you and that, or I can say. I don’t care. You can tell I have $20 because that’s between you and Joyce. You never borrowed money from me before. So I don’t think you’re going to do me dirty.
Or, I could say this seems like a, you know, something that he’s, that he does. So I don’t want to take the chance. I was able to see what his credit was like with Joyce before I was able to take a risk. So now you want a bank to buy you a house and they can’t determine how well you’ve been able to even pay back a credit card?
So I would like to see somebody get financed for a house with no credit. Now, if you have Oprah money or Tyler Perry money, listen, dump your cash on the house and go about your business. But if you need financing, you need good credit. I don’t know how else to say that. They need to see how well you’ve been able to do.
When you go to college. Why do you think they want to see your transcripts? How did you do in high school before we let you in here? And even though you do have to pay us to be here and we don’t, don’t waste our time and we don’t want to waste yours. That’s why they have requirements. You need this sat score to get in here. You need this GPA to get in here.
So you need this credit score for us to buy you something so you can pay us back. So prime example, client, $515 a month or a car. It didn’t hurt her because she made good money. $515 was nothing to her, but I said, let me do, I did some math for you. Let me give you some, some numbers here. I said, you’ve been paying on your car note for 18 months.
Now you have an 84 months term. Okay. So $515 at 18 months is about $9,300. She was like, okay. I said, let me tell you how much of that $9,300 has gone towards the actual principal: $1300. She cried on the phone. She said, what do you mean? I said, let me break it down for you even more. That means of the $515 a month you’ve been paying only$65 has been going towards paying your car down.
Now where’s the other money going? She was like interest? I said, yes. So now tell me what your interest rate is. 24%. Why is her interest rate 24%? Because she has bad credit. It is expensive to have bad credit. So that’s another thing you can tell your family, Ms. Joyce, listen, you might see it, not see it now, but look how expensive it can be.
So they’ll calculate it. How much she’s going to end up paying for that car at the end of her 84 month term? Three times, three times.
Joyce: Thank you. Thank you. Because it just drives me crazy all the time. Every time I’m like, oh my God. Just because one guru said and the amount, when you have good credit, you saved money.
Like, I don’t, it’s hard to explain when you have like, like when you have like good. They don’t see it. They don’t see the benefit. They always see there’s some credit to something negative in my community. Like the assume, well, you know, I ain’t rich, you know, or they go and go to church and they see this guru in charge and they’re like credit score, it’s bad.
It’s this. And then that’s what I’m facing in my small community of, of, of, um, the emails that I’m getting. It’s that I’m like, oh my gosh. Okay. Okay. Let me, cause I don’t have any debt, you know, like I pay it off. So sometimes. Maybe I can’t can’t relate or I’m just like, you know, that’s not really what happens, you know, or if I say I have a mortgage, they automatically assume it’s bad because I have to pay it off. You know, things like that. It’s always the same topic that it’s the credit. There’s the same thing. Like, like you said, the why, the understanding as to why they got there. I see it in my community now, because for some reason last year, it boom.
That’s what I’m seeing now. So thank you. I really enjoyed this conversation.
Brynne: Before we let you go here really quick. I just want to ask you, like, what are you working on now that you are most excited about? Where can people check you out? Where can people find you and follow you? Because they’re going to need to, after this, this was so informative and so educational.
Shanté: I love it. You guys had some great questions, too. So thank you for having me. I know this was a lengthy interview, but I only scratched the surface of credit and the ins and outs and how it really works. And I tell people it is a game. This credit is a game. And if you learn the rules to this game, you will be successful at winning this game.
I don’t know how to play chess. You put a board in front of me. I’m just going to be moving pieces around I don’t know what I’m doing. I’m jumping over here. Like I’m playing checkers. I don’t know what’s happening, but if you teach me the rules, I can navigate a little better. I might use sometimes it might take me a long time to win a round, you know, maybe seven years until I finally beat someone, but I learned the rules.
Right? So that’s all, that’s what it’s all about. Learning the rules and implementing them every time I’ve watched tennis, someone has to reteach me the scoring because I always forget because I don’t watch it enough to remember. So don’t just learn this stuff and then sit on it, learn it and start applying it so you can keep the, what you’re learning in the forefront of your brain.
Right? So I started my company, Financial Common Cents from my group. I have a Facebook group, Financial Common Cents, spelled C E N T S. We are 200 people away from 96,000 members, very active, very busy group, other choices. Um, but that’s where I do all of my free information, free content. I go live. I just I’m, they’re just dumping, dumping the information on reiterating things on, you know, singing people’s praises when they have success stories, you know, um, making people feel encouraged when they feel down.
Um, and this is a very encouraging group, no judgment there, and the people who do they get kicked out. Without question, I don’t have time for that. So if you want to join and just ask questions or maybe just browse, just search the group, you don’t have to ever ask a question and you can find every answer you need, because everything has been discussed 500 times in the group.
So join us there. I am on social media, other social media type on Instagram at Financial Common Cents. And the Facebook page is Financial Common Cents, Inc. Because that’s the business things. I also do. One-on-one coaching sessions. So if you heard all of this and you’re like all overwhelmed again, I know GPS died.
Tell me where you want to go. I will tell you how to get there. I did a music video in April, a real live music video about credit and finance. And I rewrote the lyrics. The Cardi B’s newest, newest song called Up. Cause I was like, convenient. We want to get those scores up. So I wrote the lyrics, found a videographer and got my girls together and found some locations.
And we shot a music video. Well, they do the Plutus award every year. And one of the co-hosts reached out and said, we want to show your video at the Plutus awards, which I almost passed out because it’s a lot of people that attend. And so that was really great. And they also want me to help present an award.
So that’s not a project I’m working on since the video was done, but I’m very, very excited about that. The project I’m currently working on now is a home-buying academy. When that people say they want to boost their scores, they call me do consultations. I say, what are your goals? 99.9% of the people say, I want a house for me and my kids.
I’m tired of this apartment. I’m tired of blah, blah, blah. So instead of me just keep saying, Hey guys, this is how you build your scores up. Let me be even more specific. This is how you build the scores to get here. So what is the home buying process? Here’s some first time home buyer program information, what is an appraisal?
What’s an inspection. What does escrow mean? So just all the things they may hear and they’re so confused, what’s the difference between an FHA loan and a commission loan. What are their requirements? You know, all of those things. So that’s what I’m working on. It’s going to be a book, but also video modules.
And so that’s going to be combined with the program that I already have, which is the credit repair GPS academy. And so you don’t want to do a one-on-one with me cause you’re like, oh, it cost too much. I do better learning self-paced programs then the GPS program is about half off of what a one-on-one would be with me, but it still renders the same results.
So yeah, just adding that home buying book, because a lot of people are confused about even that. So you’re already confused about credit. So you finally got your credit together and you’re like, now I don’t even know what to do to get in this house. I’m just adding that. So that’s what I’m currently working on right now.
And I’m so excited about it. Um, cause I know it’s this one it’s just going to change lives more than, you know, labs are already been changing. So pretty proud of what my members and clients have been able to do.
Brynne: That’s like my number one thing with my credit score is always okay, I’m taking out a big loan, like a mortgage or something.
And if your credit score is better, then you’re going to pay a whole lot less in interest over the course of that 30 year loan. And that’s massive. So I’m just, I’m so excited. I think that’s going to help so many people and thank you so much for being here.
Brynne: Oh my gosh. I love Shanté. She’s a great educator.
Like she’s just so fun and makes it so easy to like, think about these very complex topics, you know?
Joyce: I think I am going to go and discuss with my family about the FICO scores and the difference and what it’s used and not used because a lot of people have a misconception about this. So it was good to know about those apps, that claim to change your FICO score instantly.
That was a good topic right there.
Brynne: For sure, for sure. And just all those misconceptions that, you know, we, we always carry around with us. I love how she addressed so many of those today. So thank you, Shanté.
Joyce: Yes, thank you!
Brynne: All right, guys, if you enjoyed this episode, please leave us a five star review on whatever your platform of listening choice is.
It’s also super helpful if you subscribe on that platform, whether that’s apple podcast, Spotify, Stitcher, whatever, you can also check out our website, MomAutismMoney.com. We’ve got all our episodes up live there. You can subscribe to our email there as well, and you can join our Facebook group. And that is just the Mom Autism Money Facebook group.
And in there we talk just a little bit more about all of these topics in depth, and you can kind of connect with other parents going through some similar situations. All right. We will see you guys next week.