What is money for? 00:00:01.33\00:00:02.90 Is it a helpful resource to use for good 00:00:02.93\00:00:05.60 or is the love of it the root of all evil. 00:00:05.63\00:00:08.44 Actually, it's both. 00:00:08.47\00:00:10.27 But God may have 00:00:10.31\00:00:11.64 a different definition of success. 00:00:11.67\00:00:13.64 Real success doesn't come overnight. 00:00:13.68\00:00:16.24 It takes hard work, and faithful planning. 00:00:16.28\00:00:20.58 To use your dollars well, 00:00:20.62\00:00:22.22 it takes more than a little sense. 00:00:22.25\00:00:24.89 Welcome to Dollars and Sense. 00:00:27.89\00:00:29.59 I'm Yvonne Lewis, co-host for this program, 00:00:29.62\00:00:32.16 and the primary host is Ryan Mack, 00:00:32.19\00:00:34.60 our financial literacy expert, 00:00:34.63\00:00:37.03 who has been teaching us so much stuff. 00:00:37.10\00:00:40.30 Hey, Ryan! Having a great time doing it. 00:00:40.37\00:00:42.24 Oh, man, this is exciting to me 00:00:42.27\00:00:46.17 because any time I learn something new, I get excited, 00:00:46.21\00:00:48.94 because it's just, and I know you're learning. 00:00:48.98\00:00:51.28 I know you're learning this stuff. 00:00:51.31\00:00:52.88 So we are going to be talking today about credit. 00:00:52.91\00:00:56.55 Credit, yes. 00:00:56.62\00:00:57.95 And that's super, super important, 00:00:57.99\00:00:59.79 because so many people have bad credit. 00:00:59.82\00:01:01.29 Right. 00:01:01.32\00:01:02.66 And I think it's more important 00:01:02.69\00:01:04.63 than what people realize in this day, 00:01:04.66\00:01:07.20 and in this particular economy and we'll explain why. 00:01:07.23\00:01:11.97 First, I want to just let people know 00:01:12.00\00:01:14.04 what the scripture says... 00:01:14.10\00:01:15.44 Yes. About credit. 00:01:15.47\00:01:16.81 Good. 00:01:16.84\00:01:18.17 Now this is something that there's no question 00:01:18.21\00:01:21.74 that they actually took the law, 00:01:21.78\00:01:23.81 the Fair Credit Reporting Act, 00:01:23.85\00:01:25.38 and they devised a law based on actual scripture, 00:01:25.41\00:01:28.55 and I going to show you here. 00:01:28.58\00:01:30.65 The first scripture is this one that I like to, 00:01:30.69\00:01:33.02 from Psalm 37:21. 00:01:33.05\00:01:36.16 "The wicked borrows but does not pay back, 00:01:36.19\00:01:38.33 but the righteous is generous and gives." 00:01:38.36\00:01:41.56 And so, obviously credit does just that. 00:01:41.60\00:01:46.17 It analyzes. 00:01:46.20\00:01:47.57 The Fair Isaac Corporation, they analyze, 00:01:47.60\00:01:52.11 and we'll talk about what does FICO mean? 00:01:52.14\00:01:54.48 Who was the Fair Isaac Corporation, 00:01:54.51\00:01:57.28 but they want to figure out who's righteous, 00:01:57.31\00:02:00.62 and who pays back? 00:02:00.65\00:02:02.18 And the goal of credit score is almost 00:02:02.22\00:02:06.29 a measure of your righteousness, right? 00:02:06.32\00:02:08.89 And it's from 350 to 850. 00:02:08.92\00:02:11.23 And it really says, okay, well, the higher your score, 00:02:11.26\00:02:14.36 the more righteous you are, 00:02:14.40\00:02:15.80 so, the more prone you are to pay back, 00:02:15.83\00:02:17.63 so the more easy it is to get a loan. 00:02:17.67\00:02:19.77 So now, I'm going to read 00:02:19.80\00:02:23.10 a piece of the Fair Credit Reporting Act first. 00:02:23.14\00:02:26.47 Now, the Fair Credit Reporting Act, FCRA, 00:02:26.51\00:02:30.41 it says this, that most negative items must be removed 00:02:30.45\00:02:35.48 from your credit report seven years 00:02:35.52\00:02:38.19 from the first date of delinquency. 00:02:38.22\00:02:40.82 Some exceptions to the seven-year rule 00:02:40.86\00:02:42.86 include Chapter 7, 00:02:42.89\00:02:44.56 bankruptcy filings, judgments, 00:02:44.59\00:02:46.96 money owed to or guaranteed by the government, 00:02:47.00\00:02:49.23 so there are some exceptions 00:02:49.26\00:02:50.60 but the important part of that is, 00:02:50.63\00:02:52.67 it says, most negative items must be removed. 00:02:52.70\00:02:56.74 Negative items meaning things you owe, right? 00:02:56.77\00:02:59.61 Most negative items must be removed 00:02:59.64\00:03:02.01 from your credit report seven years 00:03:02.04\00:03:03.85 from the first date of delinquency. 00:03:03.88\00:03:06.35 Now, let's go over to Deuteronomy 15:1-2. 00:03:06.38\00:03:10.82 Okay. 00:03:10.89\00:03:12.22 So, Deuteronomy 15:1-2 says, 00:03:12.25\00:03:16.09 "At the end of every seven years, 00:03:16.12\00:03:19.56 thou shalt make a release. 00:03:19.59\00:03:22.70 And this is the manner of the release: 00:03:22.73\00:03:25.80 Every creditor that lendeth ought 00:03:25.83\00:03:28.07 unto his neighbor shall release it, 00:03:28.10\00:03:30.87 he shall not exact it of his neighbor, 00:03:30.91\00:03:34.24 or his brother, 00:03:34.28\00:03:35.61 because it is called the Lord's release." 00:03:35.64\00:03:39.25 So, literally Deuteronomy 15:1-2 00:03:39.28\00:03:43.15 is the Fair Credit Reporting Act. 00:03:43.18\00:03:45.65 Wow. 00:03:45.69\00:03:47.02 This is were they derived the law from, 00:03:47.06\00:03:48.39 from the Word of Christ. 00:03:48.42\00:03:52.83 Many times individuals will say, well, it's derived. 00:03:52.86\00:03:54.96 No, no, this is the actual law. 00:03:55.00\00:03:57.57 And it's the Lord's law, the Lord's release, 00:03:57.60\00:04:01.27 and it's the law that derives our law. 00:04:01.30\00:04:03.81 Isn't it interesting how there are so many, 00:04:03.84\00:04:06.98 like if you look at the Constitution, 00:04:07.01\00:04:10.25 the Constitution is based on the law of God? 00:04:10.28\00:04:13.15 Exactly. Yeah. 00:04:13.18\00:04:14.52 It's really interesting even though... 00:04:14.55\00:04:16.28 I don't know that they necessarily intended for it 00:04:16.32\00:04:18.62 to be like that per se 00:04:18.65\00:04:20.86 because they weren't necessarily Christian 00:04:20.89\00:04:22.49 even though people think they were, 00:04:22.52\00:04:24.13 but it's interesting that, you know, God's law is, 00:04:24.16\00:04:29.20 as we've said before, said on this program, timeless. 00:04:29.23\00:04:35.20 This law applies, 00:04:35.24\00:04:38.44 this word here in Deuteronomy applies to the law. 00:04:38.47\00:04:41.28 Exactly. 00:04:41.31\00:04:42.64 And the other thing that you mentioned, 00:04:42.68\00:04:44.51 I think we should expand on that a bit, 00:04:44.55\00:04:46.61 is the integrity of a person is bound into, 00:04:46.68\00:04:52.55 if you say you're gonna, 00:04:52.59\00:04:54.22 if you buy something with credit, 00:04:54.26\00:04:56.62 with the credit card, 00:04:56.69\00:04:58.03 you're supposed to pay it back. 00:04:58.06\00:04:59.39 Right. 00:04:59.43\00:05:00.83 I mean, it's really about, again, what the Psalm says, 00:05:00.86\00:05:04.27 righteousness, right? 00:05:04.30\00:05:06.07 To be righteous is a man of his word 00:05:06.10\00:05:08.60 or a woman of her word, someone who has integrity. 00:05:08.64\00:05:12.31 They say what they're going to do and they do it. 00:05:12.34\00:05:14.18 They mean what they say and they say what they mean. 00:05:14.21\00:05:16.51 They make a promise, they don't break it. 00:05:16.54\00:05:19.41 They have honor, they have a code, and this, again, 00:05:19.45\00:05:23.79 the credit is essentially a measure of that code. 00:05:23.82\00:05:27.26 So normally, if you have a community 00:05:27.29\00:05:33.03 and the average credit score is higher in that community, 00:05:33.06\00:05:36.73 it's normally a more wealthy community 00:05:36.77\00:05:39.17 because if you just measure by a credit score, 00:05:39.20\00:05:41.74 what it's saying is that this community has practices 00:05:41.77\00:05:45.87 that says they pay back debt, they pay off things, 00:05:45.91\00:05:50.65 they pay off loans, they are more responsible, 00:05:50.71\00:05:52.51 they're paying back on time, 00:05:52.55\00:05:54.18 they have a good credit history. 00:05:54.22\00:05:55.95 So all of these are practices that are not a 100% indication 00:05:55.98\00:06:00.99 but are somewhat of an indication of where 00:06:01.02\00:06:03.36 and how an individual is doing economically 00:06:03.39\00:06:05.49 because they have the practices 00:06:05.53\00:06:06.96 that usually should translate to better economic standing 00:06:07.03\00:06:12.30 in the community. 00:06:12.33\00:06:13.74 And the reason I feel that the credit score 00:06:13.77\00:06:16.91 is one of the most important components 00:06:16.94\00:06:19.31 of financial literacy 00:06:19.34\00:06:21.91 is when you want to talk about 00:06:21.94\00:06:23.28 and introduce a term called gentrification, right? 00:06:23.35\00:06:26.92 Many times individuals think 00:06:26.95\00:06:28.28 that gentrification is more of a black thing 00:06:28.32\00:06:30.99 or a minority thing, 00:06:31.02\00:06:32.62 and gentrification is not necessarily a minority thing, 00:06:32.65\00:06:35.32 it really is just about individuals 00:06:35.36\00:06:37.03 who have a higher level of wealth, 00:06:37.06\00:06:40.43 are able to capitalize on depressed property values 00:06:40.50\00:06:43.33 in an area, 00:06:43.37\00:06:44.70 they're able to move in, and those individuals 00:06:44.73\00:06:47.50 who are there, 00:06:47.54\00:06:48.87 because there are depressed property values, 00:06:48.90\00:06:51.94 as individuals move in that have more of a means 00:06:51.97\00:06:54.48 to pay more, 00:06:54.51\00:06:55.84 property values start going back up, 00:06:55.88\00:06:57.71 and those who are living there 00:06:57.75\00:06:59.08 now can no longer afford to remain there, 00:06:59.11\00:07:01.52 so therefore, they move away. 00:07:01.55\00:07:03.72 Just kind of what happened in Harlem, isn't it? 00:07:03.75\00:07:05.49 Exactly. 00:07:05.52\00:07:06.89 Now, I mean, I was actually a... 00:07:06.92\00:07:09.89 because I was a professional 00:07:09.92\00:07:11.26 who was making a little bit more money than average, 00:07:11.29\00:07:14.10 when I moved to Brooklyn, 00:07:14.13\00:07:15.66 that's why it's not a black thing, 00:07:15.70\00:07:17.20 it's a green thing. 00:07:17.27\00:07:18.60 When I moved to Brooklyn, I'm black, 00:07:18.63\00:07:21.37 I moved into a predominately black neighborhood 00:07:21.40\00:07:23.54 but the means and economic means, 00:07:23.61\00:07:25.74 I was slightly higher than the average 00:07:25.77\00:07:28.44 so I was able to afford that exorbitant rent 00:07:28.48\00:07:31.28 of that little small, little studio apartment 00:07:31.31\00:07:33.62 that I could hardly spin a circle in 00:07:33.65\00:07:35.75 without bumping into myself, right? 00:07:35.78\00:07:37.89 So I mean, but that's what gentrification is. 00:07:37.92\00:07:40.96 So now, when you're talking about gentrification 00:07:40.99\00:07:43.83 as it relates to credit, what does that mean? 00:07:43.86\00:07:47.60 When someone who's living there, 00:07:47.60\00:07:49.06 who's in that community, 00:07:49.10\00:07:52.10 credit says, I have access to capital, 00:07:52.13\00:07:55.10 and in this economy when you're moving into a community 00:07:55.14\00:07:58.27 that has depressed property values, 00:07:58.31\00:08:00.31 where credit is not as prevalent 00:08:00.34\00:08:02.01 as it was before in this economy now, 00:08:02.04\00:08:04.18 banks are not lending as much as they once were before. 00:08:04.21\00:08:05.91 Right. 00:08:05.95\00:08:07.28 So really there are only two individuals 00:08:07.35\00:08:09.15 who are at better situation to be able to capitalize off 00:08:09.18\00:08:12.75 of depressed property values, 00:08:12.79\00:08:14.42 that is people with high levels of liquidity, 00:08:14.46\00:08:16.99 meaning have cash in their pocket, 00:08:17.06\00:08:19.46 have a lot of money, 00:08:19.49\00:08:20.83 I can go in, and I don't care about loans 00:08:20.86\00:08:22.96 and what not, I can just buy a piece of property. 00:08:23.00\00:08:24.63 And that's what a lot of investors 00:08:24.67\00:08:26.00 are doing in cities like Detroit 00:08:26.03\00:08:27.64 and areas around the country that have depressed values. 00:08:27.67\00:08:31.61 So people that have a lot of cash, investors go in 00:08:31.64\00:08:33.78 and just buy up everything, 00:08:33.81\00:08:35.21 or people that have good credit, 00:08:35.24\00:08:36.95 because now they have access to capital, 00:08:36.98\00:08:39.28 they can get loans, 00:08:39.31\00:08:40.65 so they can purchase pieces of property, 00:08:40.72\00:08:42.05 so if you're living there, and you don't have good credit, 00:08:42.08\00:08:45.49 then you're one of the ones who's saying if I'm renting, 00:08:45.52\00:08:49.12 if you wanted to buy a piece of property you couldn't 00:08:49.16\00:08:51.43 because you more than likely don't have the cash to do it, 00:08:51.46\00:08:54.10 and you couldn't buy it 00:08:54.10\00:08:55.43 because your credit is not good to do it. 00:08:55.46\00:08:56.83 So what's going to happen? You're going to be left out. 00:08:56.87\00:08:59.10 Individuals are going to be moving in 00:08:59.13\00:09:00.77 with good credit and cash 00:09:00.80\00:09:02.94 and then they'll be purchasing property around you 00:09:02.97\00:09:05.51 and what's happened is you're going to have to then leave 00:09:05.54\00:09:07.51 because the rents are going to get so high, 00:09:07.54\00:09:09.04 it's gonna get well beyond your means to afford 00:09:09.08\00:09:11.08 and you don't own anything so you can't control anything 00:09:11.11\00:09:14.48 and you're gonna have to move out, 00:09:14.52\00:09:15.85 so literally credit is one of the central components 00:09:15.88\00:09:19.89 to how our property value is, 00:09:19.92\00:09:22.69 and I mean how are our communities 00:09:22.72\00:09:24.36 are going to recover, and whether or not 00:09:24.39\00:09:26.53 they're going to look like those individuals 00:09:26.56\00:09:28.03 who are currently there versus individuals 00:09:28.06\00:09:30.97 who can afford to move there and then price out individuals 00:09:31.00\00:09:34.27 who are currently living there. 00:09:34.30\00:09:35.94 And this is not a, and I mean, a lot of individuals say, 00:09:35.97\00:09:39.31 well, you know, we should have more policy. 00:09:39.34\00:09:43.68 This isn't related to policy. 00:09:43.75\00:09:45.35 This isn't related to what the politicians are doing. 00:09:45.38\00:09:48.22 This isn't related to, and there are systemic issues, 00:09:48.25\00:09:50.99 don't get me wrong, but when it comes to credit, 00:09:51.02\00:09:53.36 this is purely related based on our own habits, 00:09:53.39\00:09:57.66 our own practices. 00:09:57.69\00:09:59.13 What we do every single day which is what makes me excited, 00:09:59.16\00:10:02.33 which gives me faith that says, 00:10:02.36\00:10:04.03 "We can make a difference by just changing 00:10:04.07\00:10:06.13 how we operate and change. 00:10:06.17\00:10:08.64 We have control over our own financial destinies 00:10:08.67\00:10:11.01 by good credit." 00:10:11.04\00:10:12.37 And I think, I had to put that definition of gentrification, 00:10:12.41\00:10:14.51 as it relates in here 00:10:14.54\00:10:15.88 because I know it's a big concern to a lot of people 00:10:15.91\00:10:18.51 in many areas all across this country, 00:10:18.55\00:10:21.38 and I think it's about that time 00:10:21.42\00:10:22.75 that we start understanding where the solutions come from. 00:10:22.78\00:10:25.62 It comes from within and that comes from 00:10:25.65\00:10:28.72 laid-out foundation from Christ. 00:10:28.76\00:10:30.59 Absolutely. 00:10:30.63\00:10:31.96 We can't blame others. Right. 00:10:31.99\00:10:36.26 One of the things that I've learned is that 00:10:36.30\00:10:40.17 when the buck stops with me, if I make a mistake, 00:10:40.20\00:10:44.94 if I mess up then it's my fault, 00:10:44.97\00:10:47.51 yet we're not discounting systemic issues, 00:10:47.54\00:10:50.71 institutionalized racism, we're not... 00:10:50.78\00:10:54.58 Those things are real. Yeah. 00:10:54.62\00:10:56.02 But there's also personal responsibility, 00:10:56.05\00:10:58.89 and when you talk about 00:10:58.92\00:11:00.56 the righteousness associated with this, 00:11:00.59\00:11:04.49 you're now talking about it's right doing, 00:11:04.53\00:11:08.56 it's the right discipline, it's the right habits. 00:11:08.60\00:11:12.37 That's what we're talking about, 00:11:12.40\00:11:14.20 so we don't want people to misunderstand 00:11:14.24\00:11:15.80 when you said this is righteousness. 00:11:15.84\00:11:17.64 We know that Christ is our righteousness. 00:11:17.67\00:11:20.04 That's the righteousness of Christ over here. 00:11:20.08\00:11:22.78 We're not talking about that. 00:11:22.81\00:11:24.15 We're talking about right doing and these discipline 00:11:24.21\00:11:27.68 and habits that have to come into play in order for us 00:11:27.72\00:11:31.85 to have integrity. 00:11:31.89\00:11:33.22 Right. Exactly. 00:11:33.25\00:11:34.59 And then the beautiful part about basing your life 00:11:34.62\00:11:36.79 on the Word is this level of righteousness 00:11:36.83\00:11:39.73 comes from the Word. 00:11:39.76\00:11:41.20 It teaches you that. That's right. 00:11:41.23\00:11:42.70 It shows you the roadmap of, 00:11:42.73\00:11:45.80 "Okay, if you want to be righteous, 00:11:45.83\00:11:48.67 this is what you do." 00:11:48.70\00:11:50.34 The wicked borrows but does not pay back. 00:11:50.37\00:11:52.77 If you want to be wicked, borrow, 00:11:52.81\00:11:54.78 and then don't pay back. 00:11:54.81\00:11:56.14 And you'll be measured 00:11:56.18\00:11:57.51 according to the worldly standard, 00:11:57.58\00:11:59.58 FICO, there as a credit, 00:11:59.61\00:12:02.12 it measures the level of wickedness 00:12:02.15\00:12:03.82 and also measures the level of righteousness. 00:12:03.89\00:12:06.59 But it also indoctrinates the Deuteronomy 00:12:06.62\00:12:10.46 inside the actual law, 00:12:10.53\00:12:12.83 this is a case where this is not, this is close 00:12:12.86\00:12:17.60 or this is something that's happenstance. 00:12:17.63\00:12:19.87 No, this is the law. Right. 00:12:19.90\00:12:21.57 This is the law of Christ that the world copied 00:12:21.60\00:12:25.17 and made it the law of the land. 00:12:25.21\00:12:28.24 And I think that we ought to just take heed 00:12:28.28\00:12:30.21 that it has to be that... 00:12:30.25\00:12:31.78 I think they're doing something right in the Bible. 00:12:31.81\00:12:33.38 Right. 00:12:33.42\00:12:34.75 To have people copy them and say, 00:12:34.78\00:12:36.12 "We're going to make them law of the land." 00:12:36.15\00:12:37.49 Absolutely. 00:12:37.52\00:12:38.85 And so I will choose to believe the law of Christ. 00:12:38.89\00:12:40.42 Amen. 00:12:40.46\00:12:41.79 So I wanted to just go over some things 00:12:41.82\00:12:44.46 of how we break down credit. 00:12:44.49\00:12:48.80 And one, what does it mean, 00:12:48.83\00:12:50.20 we talked about the importance of it. 00:12:50.23\00:12:52.63 How is it measured again? 00:12:52.67\00:12:54.57 It's the FICO, the Fair Isaac Corporation. 00:12:54.60\00:12:58.87 It's a private corporation 00:12:58.91\00:13:01.58 and they have a monopoly over essentially 00:13:01.61\00:13:05.71 how credit is being measured. 00:13:05.75\00:13:08.18 There are other measures out there called the VantageScore 00:13:08.22\00:13:13.05 but because the VantageScore is not as prevalent, 00:13:13.09\00:13:17.03 most lenders do not even use the VantageScore, 00:13:17.06\00:13:20.00 and the only point of having a credit score 00:13:20.03\00:13:22.33 is to make sure you can get a loan, 00:13:22.36\00:13:24.33 or have yourself evaluated by someone 00:13:24.37\00:13:26.90 who can give you some capital 00:13:26.94\00:13:28.97 and if Vantage is not being used by the lenders 00:13:29.00\00:13:32.61 then it kind of makes it null 00:13:32.64\00:13:34.08 and void as opposed to just may be it could be an ego boost 00:13:34.14\00:13:36.21 to say I have a bigger VantageScore 00:13:36.24\00:13:40.68 and what have you. 00:13:40.72\00:13:42.05 So the VantageScore don't necessarily look at that, 00:13:42.08\00:13:45.02 but the FICO score is very important. 00:13:45.05\00:13:47.52 And the FICO score as well as your credit report. 00:13:47.56\00:13:50.33 Now, you have access to be able to go 00:13:50.39\00:13:52.53 to annualcreditreport.com. 00:13:52.56\00:13:55.36 At least once a year for every... 00:13:55.40\00:13:57.03 You have three credit bureaus, Equifax, TransUnion, 00:13:57.10\00:13:59.60 and Experian. 00:13:59.63\00:14:01.10 Now, the way the system is set up is that 00:14:01.14\00:14:03.27 there are local credit bureaus, 00:14:03.30\00:14:05.51 many individuals don't know this 00:14:05.54\00:14:06.88 but there are local credit bureaus set up 00:14:06.91\00:14:08.78 across the country. 00:14:08.81\00:14:10.15 So whenever you pay your bill, 00:14:10.18\00:14:11.68 many of your bill providers report 00:14:11.71\00:14:14.65 to these local credit bureaus, 00:14:14.68\00:14:16.02 and these local credit bureaus and then turn around, 00:14:16.05\00:14:17.82 and sometimes the bill providers 00:14:17.85\00:14:19.65 report directly to the national credit bureaus, 00:14:19.69\00:14:22.92 but many times they'll go to these local credit bureaus 00:14:22.96\00:14:24.96 and then they report to the national credit bureaus. 00:14:24.99\00:14:27.96 This is why when you go to Equifax, TransUnion, 00:14:28.00\00:14:30.33 or Experian most of the time 00:14:30.37\00:14:32.40 you'll have different credit reports, 00:14:32.43\00:14:33.80 or credit scores. 00:14:33.84\00:14:35.17 Right. 00:14:35.20\00:14:36.54 Because sometimes this bill provider 00:14:36.57\00:14:38.37 or service provider did not report 00:14:38.41\00:14:40.64 to that local credit bureau, 00:14:40.68\00:14:42.01 and they didn't get up to the national credit bureau, 00:14:42.04\00:14:44.21 so that's why you have to check all three, 00:14:44.25\00:14:45.85 not just one. 00:14:45.88\00:14:47.22 But you get one free credit report per year 00:14:47.28\00:14:49.52 from annual credit reports, 00:14:49.55\00:14:50.89 so I urge everyone to go out to annualcreditreport.com, 00:14:50.95\00:14:53.82 and get your free credit report every single year. 00:14:53.86\00:14:56.89 And maybe even consider paying for the next one. 00:14:56.93\00:14:59.03 But we have other good sources. Yeah. 00:14:59.06\00:15:01.03 I was, I don't know where I found, 00:15:01.06\00:15:04.50 maybe on television or something 00:15:04.53\00:15:06.00 and watched the commercial 00:15:06.03\00:15:07.37 and I've tried it the Credit Karma. 00:15:07.44\00:15:09.47 Yeah. I use that. 00:15:09.50\00:15:11.61 You can get your credit report every day if you want it. 00:15:11.64\00:15:13.98 Right. 00:15:14.01\00:15:15.34 You can see what your scores are with two of the agencies, 00:15:15.38\00:15:20.62 two of the credit agencies and it's amazing 00:15:20.65\00:15:25.49 because I've watched my credit score get better 00:15:25.52\00:15:29.42 and it really wasn't good for various reasons, 00:15:29.46\00:15:32.73 it really wasn't good, 00:15:32.76\00:15:34.10 but the Lord has really helped me to bring it up 00:15:34.10\00:15:38.43 and it's much better now 00:15:38.47\00:15:40.04 and now I'm really concerned about it. 00:15:40.10\00:15:42.54 So I'm always looking on there and checking it, 00:15:42.57\00:15:45.37 seeing where it is, seeing when it went down, 00:15:45.41\00:15:47.34 why did it go down, it tells you all of that, 00:15:47.38\00:15:49.54 so I mean it's just worth it. 00:15:49.58\00:15:51.35 But there was a time when things were, 00:15:51.38\00:15:55.72 because I was self-employed, things were just really low. 00:15:55.75\00:15:59.12 Right. It happens. Yeah. 00:15:59.15\00:16:01.32 I didn't pay some debt when I started 00:16:01.36\00:16:03.49 Optimum Capital Management back in 2004. 00:16:03.56\00:16:07.93 There was a couple of years I didn't pay off some debt, 00:16:07.96\00:16:09.90 took out from credit cards, and I had some hard times. 00:16:09.93\00:16:14.67 Did your credit score go down? 00:16:14.70\00:16:16.04 Oh, yeah. It was, it was dismal. 00:16:16.07\00:16:18.34 It was back then. 00:16:18.37\00:16:20.11 I mean, that was all the days 00:16:20.18\00:16:21.51 where I literally had 12 months living expenses 00:16:21.54\00:16:26.18 and I had to take out a credit card 00:16:26.21\00:16:28.05 in order to cover the additional 00:16:28.08\00:16:29.48 after that 12 months ran out, 00:16:29.52\00:16:31.82 I had a few clients, 00:16:31.85\00:16:33.56 and as things were slowly trickling in, 00:16:33.59\00:16:36.32 I had faith in God, 00:16:36.36\00:16:37.99 and that's when 2006 or '07 rather, 00:16:38.03\00:16:42.76 I broke into Black Enterprise magazine 00:16:42.80\00:16:44.80 that gave me a good marketing boost, 00:16:44.83\00:16:46.33 and then CNN hit 2007 and '08, 00:16:46.37\00:16:49.54 and then that's when things shot up 00:16:49.57\00:16:50.91 and I paid off all my debt. 00:16:50.94\00:16:52.27 Wow. 00:16:52.31\00:16:53.64 But for those couple of years it was, 00:16:53.68\00:16:55.88 you know, cheese nips and tuna fish. 00:16:55.91\00:16:57.25 Yeah. 00:16:57.31\00:16:58.65 It was... 00:16:58.68\00:17:00.08 It was hard times, man, it was, and I remember that. 00:17:00.12\00:17:03.25 You're absolutely right, 00:17:03.28\00:17:04.62 sometimes we go through those times, 00:17:04.65\00:17:06.09 and everybody does, 00:17:06.12\00:17:07.49 no one is above that, you know. 00:17:07.52\00:17:09.16 Right, right, and there are times when, 00:17:09.19\00:17:12.06 you know, the threat will be made, 00:17:12.09\00:17:14.10 "Well, we're going to report this 00:17:14.13\00:17:15.46 to the credit agency." 00:17:15.50\00:17:18.10 I mean, if your credit rating is really low, 00:17:18.13\00:17:20.57 it's like, you know, do whatever you have to do, 00:17:20.64\00:17:22.84 but you really work against yourself. 00:17:22.87\00:17:25.01 Right. 00:17:25.04\00:17:26.37 Because that credit is so important, 00:17:26.41\00:17:29.14 that credit rating is so important, 00:17:29.18\00:17:31.01 and you are going to explain why. 00:17:31.05\00:17:32.38 Absolutely. 00:17:32.41\00:17:33.75 So the way it's broken down, 00:17:33.82\00:17:36.15 and as the Fair Isaac Corporation breaks it down, 00:17:36.18\00:17:38.59 where 35% of your FICO score 00:17:38.62\00:17:42.22 is essentially the record of you paying your bills on time. 00:17:42.26\00:17:46.26 So, your payment history. Yes. 00:17:46.29\00:17:48.10 So as you pay your bill 00:17:48.13\00:17:49.73 and if they report to a credit bureau, 00:17:49.76\00:17:51.33 now that does not always necessarily 00:17:51.37\00:17:53.70 include like a rent bill, now it is, 00:17:53.74\00:17:56.47 more and more property managers are now starting to include 00:17:56.50\00:18:00.51 or report rent payments so that individuals can now, 00:18:00.54\00:18:03.41 and many banks, I remember, Carven Make in New York, 00:18:03.48\00:18:06.75 they had a system where they allowed individuals 00:18:06.78\00:18:10.25 to have their rent payments reported 00:18:10.32\00:18:13.02 so that individuals paying rent 00:18:13.05\00:18:14.62 can now start establishing a credit history. 00:18:14.66\00:18:16.52 Nice. Which is a good service, it's very good service. 00:18:16.56\00:18:18.69 Yeah. 00:18:18.73\00:18:20.06 So, I mean, kudos to Deborah Wright 00:18:20.13\00:18:21.43 for putting that all together, a good friend of mine. 00:18:21.46\00:18:24.67 So 35% is paying your bills on time, 00:18:24.70\00:18:28.04 so using automatic bill payment, I think is key. 00:18:28.07\00:18:31.41 That has been a lifesaver for me, a lifesaver, 00:18:31.44\00:18:36.11 because for me, I don't want to think about, 00:18:36.14\00:18:39.48 okay, this bill is due on the first, 00:18:39.51\00:18:41.35 this one's due on the fifth, 00:18:41.38\00:18:42.72 this one's due on the tenth, you set it up one time 00:18:42.75\00:18:45.55 and then after that it automatically gets paid, 00:18:45.59\00:18:48.49 and that boosts your credit. 00:18:48.52\00:18:49.86 If anything that has boosted my payment history, that has. 00:18:49.89\00:18:53.50 There's a book called "The Automatic Millionaire" 00:18:53.53\00:18:55.80 it's by David Bach and I think it's a great book, 00:18:55.83\00:18:59.57 and he talks about 00:18:59.60\00:19:01.00 how millionaires are made by just automating their savings. 00:19:01.04\00:19:06.51 And when you automate your savings it, 00:19:06.54\00:19:09.04 as a financial adviser, I mean, 00:19:09.08\00:19:11.48 I used to thank God for automated savings 00:19:11.51\00:19:14.18 because that helped me work with clients 00:19:14.25\00:19:17.12 to say this puts you on this track, 00:19:17.15\00:19:20.09 where you don't have to think about it. 00:19:20.12\00:19:21.46 You can put money in your 401K, your IRA, 00:19:21.49\00:19:24.06 and all of the savings accounts automatically. 00:19:24.09\00:19:27.66 And it became just boom and so... 00:19:27.73\00:19:29.93 If you're doing as you said, 00:19:29.96\00:19:31.30 35% of paying your bills on time, 00:19:31.33\00:19:33.10 your score starts to boost up overtime. 00:19:33.13\00:19:34.74 Right. 00:19:34.77\00:19:36.10 Now, 30% of your FICO score is your balance 00:19:36.14\00:19:39.61 to your lending limit ratio. 00:19:39.64\00:19:41.41 Okay. 00:19:41.44\00:19:42.78 So if you owe $5,000 00:19:42.81\00:19:46.55 and you can borrow up to $10,000, 00:19:46.58\00:19:49.28 your balance to your lending limit ratio is 50%. 00:19:49.32\00:19:53.09 You owe five, you can borrow 10, it's 50%. 00:19:53.12\00:19:56.73 So now, if you pay down some debt, okay, 00:19:56.76\00:20:01.53 and you pay down $2,500 of that in that same scenario. 00:20:01.56\00:20:05.63 Your balance to your lending limit ratio 00:20:05.67\00:20:07.50 goes from 5,000 to 10,000 to 2,500 to 10,000. 00:20:07.54\00:20:13.94 So it goes from 50% down to 25%. 00:20:13.98\00:20:17.61 Right? 00:20:17.65\00:20:18.98 And your credit score goes up because as your balance 00:20:19.01\00:20:21.62 to lending limit ratio decreases, 00:20:21.65\00:20:23.45 your credit score increases. 00:20:23.49\00:20:25.52 So paying down your bills is one of the fastest way 00:20:25.55\00:20:27.79 that you can dispute 00:20:27.82\00:20:29.16 or to increase your credit score. 00:20:29.19\00:20:30.96 Now, a lot of individuals will say 00:20:30.99\00:20:32.59 once I pay that $2,500 off, 00:20:32.63\00:20:35.70 if you close an account what happens is your balance 00:20:35.73\00:20:39.63 to your lending limit ratio and we follow scenario again, 00:20:39.67\00:20:42.37 it goes from 5,000 to 10,000, it was 50%. 00:20:42.40\00:20:46.21 You paid off 2,500, it's 2,500 to 10,000 it's 25%. 00:20:46.24\00:20:51.31 Now let's just say you cancel a $5,000 debt. 00:20:51.35\00:20:56.62 That goes from 50% to 25%, 00:20:56.65\00:21:00.76 and then you cancel $5,000 worth of credit card debt, 00:21:00.79\00:21:03.83 it goes from 2,500 to 5,000, 00:21:03.86\00:21:06.90 your balance to lending limit ratio goes back up 00:21:06.93\00:21:09.23 because you cancelled the credit card. 00:21:09.26\00:21:12.37 When you cancel that credit card, 00:21:12.40\00:21:14.04 essentially what the Fair Isaac Corporation 00:21:14.10\00:21:16.14 is saying is that you have less ability to take on risk 00:21:16.17\00:21:21.04 and it gets you coming and going, 00:21:21.08\00:21:22.41 and this is the part that's almost unfair 00:21:22.44\00:21:26.15 because as you take out additional credit cards, 00:21:26.18\00:21:30.35 then additional credit increase are 10% of your FICO score, 00:21:30.39\00:21:35.39 so as you apply for additional credit cards, 00:21:35.42\00:21:37.23 applying for debt, 00:21:37.29\00:21:38.73 and so if you're on an airplane 00:21:38.76\00:21:40.56 or you're in the mall, and you see a special, 00:21:40.60\00:21:44.20 a credit card special, 00:21:44.23\00:21:45.57 when you apply for that credit card, 00:21:45.60\00:21:46.97 your FICO score goes down five to six points automatically, 00:21:47.00\00:21:50.24 because they have to check, it's a hard check, 00:21:50.27\00:21:52.11 they have to check to see 00:21:52.14\00:21:54.31 if your credit is worthy of getting this additional loan, 00:21:54.34\00:21:57.48 additional ability to loan. 00:21:57.51\00:21:59.95 And then now, they're saying that 00:22:00.05\00:22:01.88 you're taking on more risk, so your credit score goes down. 00:22:01.92\00:22:04.92 So when you take on more risk and apply for more, 00:22:04.95\00:22:07.39 your credit score goes down. 00:22:07.46\00:22:08.79 You cancel old, your credit score goes down 00:22:08.82\00:22:11.36 because now you have less ability 00:22:11.39\00:22:12.99 to take on as much risk, 00:22:13.03\00:22:14.56 so that gets you coming and going 00:22:14.60\00:22:15.93 and really doesn't make a lot of sense. 00:22:15.96\00:22:17.33 Yeah. 00:22:17.37\00:22:18.70 But that's just the rules and that's how we have to... 00:22:18.73\00:22:21.17 And have a monopoly, 00:22:21.20\00:22:22.54 there is nothing that we can do. 00:22:22.57\00:22:23.91 But if you pay it off... 00:22:23.97\00:22:25.31 Yes. 00:22:25.34\00:22:26.68 So the more you close your credit cards. 00:22:26.71\00:22:29.08 So does it pay you then to just keep a low balance 00:22:29.11\00:22:31.91 on all of them? 00:22:31.95\00:22:33.28 No. 00:22:33.31\00:22:34.65 And I'll tell you the reason that doesn't 00:22:34.68\00:22:36.02 is because the way the Fair Isaac Corporation operates, 00:22:36.05\00:22:39.52 is that it operates month to month, right? 00:22:39.55\00:22:42.19 They take a snapshot of what your credit amount is 00:22:42.22\00:22:45.89 for the month of August, 00:22:45.93\00:22:48.46 they're going to take a snapshot of 00:22:48.50\00:22:49.83 what it is in September compared to August. 00:22:49.86\00:22:52.50 So as you pay it down, 00:22:52.53\00:22:54.67 what happens is your credit score goes up 00:22:54.70\00:22:57.07 because you're paying it down, so carrying a balance 00:22:57.14\00:22:59.37 really doesn't have any additional value 00:22:59.41\00:23:03.08 because that month to month is the same. 00:23:03.11\00:23:05.45 So if you carried 2,000 and you carried over the 2,000 00:23:05.48\00:23:08.38 the next month and you just pay the minimum 00:23:08.42\00:23:10.49 then it's still the same when they took that snapshot. 00:23:10.52\00:23:12.95 It's not going to be any different 00:23:12.99\00:23:14.32 but if you paid it down, it's going to go up. 00:23:14.36\00:23:17.23 So now, I'll tell you, one of the fastest ways 00:23:17.26\00:23:20.40 of getting your credit score to increase is making sure 00:23:20.43\00:23:25.37 that 75% of all credit reports have errors on them. 00:23:25.40\00:23:30.47 And this means you have a wrong name, 00:23:30.51\00:23:32.51 it could be your name was spelt wrong, 00:23:32.54\00:23:34.74 you know, you have a junior, had a senior, 00:23:34.78\00:23:39.75 if you have a father, and you are second or third, 00:23:39.78\00:23:43.69 more than likely there's probably an error 00:23:43.75\00:23:46.09 on your credit report 00:23:46.12\00:23:47.46 because they probably might have gotten mixed up 00:23:47.52\00:23:49.86 between your father and you, 00:23:49.89\00:23:51.99 in some form or the other and as many. 00:23:52.03\00:23:54.00 I mean, these are just people 00:23:54.03\00:23:55.36 at the end of the day putting information 00:23:55.40\00:23:57.20 and it's mostly automated, 00:23:57.23\00:23:58.57 but there are individuals 00:23:58.60\00:23:59.93 who insert a lot of information, 00:24:00.04\00:24:01.37 so 75% have these errors. 00:24:01.40\00:24:03.00 So go and clean up these errors and by all means, 00:24:03.04\00:24:06.01 disputing anything that you feel is wrong 00:24:06.04\00:24:09.24 on those credit cards, 00:24:09.28\00:24:10.65 on that credit report, is a very fast way, 00:24:10.68\00:24:13.52 because now they passed legislation 00:24:13.55\00:24:15.42 that they now have 30 days to respond 00:24:15.45\00:24:17.95 to that dispute. 00:24:17.99\00:24:19.32 I actually like disputing. 00:24:19.35\00:24:21.26 One way of disputing via letter. 00:24:21.29\00:24:23.73 I've done a few letters, 00:24:23.76\00:24:25.09 I mean that's the old school way, 00:24:25.13\00:24:26.56 but a easier way not to dispute, 00:24:26.59\00:24:28.16 you can go right on annualcreditreport.com, 00:24:28.20\00:24:30.57 and pull up your Experian, Equifax TransUnion report 00:24:30.63\00:24:33.94 and you can dispute right on the website, 00:24:34.00\00:24:35.57 you put an explanation and it goes automatically. 00:24:35.60\00:24:38.51 Now, from that point they have 30 days 00:24:38.54\00:24:40.24 to remove that information. 00:24:40.28\00:24:41.61 If they don't then, 00:24:41.64\00:24:43.01 then that report is automatically removed. 00:24:43.04\00:24:45.68 And if you dispute something and, now, again, 00:24:45.71\00:24:49.78 I'm not saying don't pay because it says in Romans, 00:24:49.82\00:24:53.05 "Let no debt remain unpaid except for the debt 00:24:53.09\00:24:55.02 to love one another." 00:24:55.06\00:24:56.46 So I guess, that might be a strict interpretation 00:24:56.49\00:25:00.46 of what the law says, according to the Lord's law, 00:25:00.53\00:25:05.30 you need to follow that. 00:25:05.33\00:25:06.67 If you have debt, you got to pay it back. 00:25:06.74\00:25:08.34 That's right. 00:25:08.37\00:25:09.77 So you pay it back and even though you can get it removed, 00:25:09.80\00:25:13.78 still pay it back because you owe that. 00:25:13.81\00:25:15.34 Okay? 00:25:15.38\00:25:16.75 So that's what I've done 00:25:16.78\00:25:18.65 whenever I've counseled my clients 00:25:18.68\00:25:20.45 and with Crown Financial Ministries. 00:25:20.52\00:25:23.72 But you still should know the law 00:25:23.79\00:25:25.19 of exactly how to dispute items, 00:25:25.22\00:25:27.89 because there may be many items, 00:25:27.92\00:25:29.26 you might have an item for on there, 00:25:29.29\00:25:32.29 so the 50% of your FICO score 00:25:32.33\00:25:35.30 is your length of credit history 00:25:35.33\00:25:37.53 and then 10% of your FICO score 00:25:37.57\00:25:39.80 is essentially the types or different types of debt 00:25:39.83\00:25:44.17 on your account. 00:25:44.21\00:25:45.57 So all those together makes up 100%. 00:25:45.61\00:25:49.41 And so, very quickly, what I would say for those 00:25:49.44\00:25:52.65 that are suffering from identity theft, 00:25:52.68\00:25:54.78 and I guess, we can love to do a part two on this to do. 00:25:54.82\00:25:57.92 There's still part two. 00:25:57.95\00:25:59.29 Yeah, seven steps 00:25:59.32\00:26:00.72 on how to improve your credit card, 00:26:00.79\00:26:02.12 I definitely want to get into that, 00:26:02.16\00:26:03.49 is dealing with identity theft. 00:26:03.53\00:26:04.86 Okay? 00:26:04.89\00:26:06.23 And matter of fact, we can save that for part two as well. 00:26:06.26\00:26:07.60 Ah, let's do a little cliffhanger. 00:26:07.60\00:26:08.93 Okay, we definitely will 00:26:08.96\00:26:10.47 because there's a lot of individuals out there 00:26:10.50\00:26:13.54 that are suffering from identity theft 00:26:13.57\00:26:15.67 and, I mean, I've been a victim of it 00:26:15.70\00:26:17.74 and especially now that we are in an era of, 00:26:17.77\00:26:22.01 you know, you're using the Internet at Starbucks 00:26:22.04\00:26:26.82 and it's a public internet. 00:26:26.85\00:26:28.18 Individuals can break into your domain 00:26:28.22\00:26:30.69 and they can take all your personal information. 00:26:30.72\00:26:32.45 That is becoming more and more prevalent now than ever before. 00:26:32.49\00:26:35.39 Cyber theft. Exactly. 00:26:35.42\00:26:36.86 So, that's becoming so easy now that individuals have, 00:26:36.93\00:26:39.49 they can steal your information by just walking by you 00:26:39.53\00:26:42.66 and using magnets to pull all your credit card information. 00:26:42.70\00:26:45.07 That's right. That's right. Well, we have to do a part two. 00:26:45.10\00:26:48.44 Absolutely, would love to. All right. 00:26:48.47\00:26:49.80 And let's do a takeaway. All right. 00:26:49.84\00:26:51.27 Great. 00:26:51.31\00:26:52.77 Your credit score is your ticket 00:27:00.35\00:27:02.02 to many things in your life, 00:27:02.05\00:27:03.72 whether you can buy a house, rent an apartment, 00:27:03.75\00:27:06.29 the interest rate on your mortgage, 00:27:06.32\00:27:08.12 your car payments, your insurance premiums, 00:27:08.16\00:27:10.26 your ability to get business loans, 00:27:10.29\00:27:12.33 all of these and more 00:27:12.36\00:27:13.73 are impacted by your credit score. 00:27:13.76\00:27:15.83 If you analyze, many areas across the country 00:27:15.86\00:27:18.27 with the highest levels of crime, 00:27:18.30\00:27:19.93 substance abuse, and poverty 00:27:19.97\00:27:21.84 you'll find all of these are negatively correlated 00:27:21.87\00:27:24.44 with credit scores. 00:27:24.47\00:27:25.81 The higher the credit score, the lower the crime, 00:27:25.84\00:27:28.04 substance abuse, and poverty. 00:27:28.08\00:27:30.08 The reason is simple. 00:27:30.15\00:27:31.61 With good credit, you have access to capital, 00:27:31.65\00:27:33.85 and we must demand access to capital to purchase homes, 00:27:33.92\00:27:36.99 start businesses, and build wealth. 00:27:37.02\00:27:39.05 So start today. 00:27:39.09\00:27:40.46 There are too many free resources you can use 00:27:40.49\00:27:42.59 which can help build your credit. 00:27:42.62\00:27:44.13 We'll be posting these resources continuously 00:27:44.16\00:27:46.33 on the Dare to Dream Network Facebook page. 00:27:46.36\00:27:48.40 Email me at dollarsandsense@3abn.org, 00:27:48.43\00:27:51.93 with any questions. 00:27:51.97\00:27:53.30 As always, be the change and remember, 00:27:53.34\00:27:55.54 the purpose of life is a life full of purpose. 00:27:55.57\00:27:58.14 Be blessed. 00:27:58.17\00:27:59.51