Consumer Credit Counseling – Why I love this program!
Your Credit Minute Show Notes:
00:00 What’s up, YouTubers? So, for those of you that are looking for a way to get out of debt, okay, obviously we’re not a debt relief company here, but a lot of our clients and a lot of inquiries we get here are looking for this type of help. So, I’m gonna give you an example of one program that I’m a big, big fan of and I’m gonna break down really what it is, give you the kind of, the bare bones um, or kind of the structure of what it is and then I’ll uh, make some suggestions in terms of if maybe that’s the right program for you. So, what we’re gonna talk about today is something called CCC. Another acronym. [inaudible 00:00:34]. Consumer Credit Counseling, guys. Consumer Credit Counseling I think is one of the better programs out there to help you get out of debt. Why? Number one, it is credit score neutral. Doesn’t hurt your credit score. Okay? Um, you’re not required to fall behind on the debts. Okay? It’s not a settlement program, it’s not a debt relief program. It’s a way to get out of debt. It’s a money management system. It’s a budgeting system.
01:01 So, let me break down for you really kinda how it works because it’s pretty simple stuff actually. Okay? Let’s make a little room here. So, you owe a bunch of debt. Okay? You owe a Amex for $20,000. You owe a Capital One for $10,000. You owe, I don’t know, Visa o- Walmart for $5,000. Okay? So, you have $35,000 in credit card debt right now. Okay? You’re in this debt, you can’t get out of it, you’re not sure what to do. Okay? Also, you got minimum payments of $1,500 baby. Interest (laughs) only. Guess what? Every time you send that $1,500 none of it’s going towards principal. So, you’re stuck. You’re just literally burning $1,500 every month. Why? Because uh, you were five minutes late on making these payments one month. And, guess what? Your interest rate’s 30% on this, 28% on that, 18% on this. And, keep in mind, these are fictitious and examples, okay? Don’t quote me exactly. But, your interest rates are super, absolutely insane sky high. So, you got, you’re sending $1,500 right now and you’re just kinda sending it out into the wind. Okay? So, how do we remedy this?
02:22 Okay, well, Consumer Credit Counseling might be the way. So, Consumer Credit Counseling agencies are typically nonprofit organizations. They’re nonprofit organizations, okay? Um, they should be fully licensed in the state that you live in to do business there. Usually, you are able to meet with someone face to face locally to sit down and do one of these programs as well. So, keep that I mind when you’re doing a Consumer Credit Counseling program. Okay? And, usually what the CCC is going to do is they’re gonna meet with you and they’re gonna come up with a budget. Okay? First thing they’re gonna do is they’re gonna say, how much do you make? Income. What are your expenses? Okay? Typically, the income is the issue. Most people that have gotten ems- gotten themselves into debt and qualified for CCC are people that have either had their hours cut at work, they’ve lost a job, or a spouse has lost a job. Okay? So, when they fill out one of these budgets, they’re gonna notice that. And, they’re gonna see that by, quickly, your expenses have gone up since then as well because, guess what? Um, the interest rates have gone up on all your credit cards too, so you just can’t afford this. Okay?
03:24 What they’re gonna do, and typically what they already have arranged um, is interest rate deductions. Okay? So, you see these 30- 30% interest rates? These are gonna get reduced. Okay? Usually, the CCC has arrangements with Amex, with Capital One, with Walmart card, or whatever they’re gonna be. Okay? And, they have arrangements with them that if someone does fall behind, they come through one of these programs and they’re gonna offer you a lower interest rate, as long as the CCC is managing the disbursement of the payment. So, let’s say right away they approve you for a CCC program and you get all your interest rates down to a fixed 5%. Okay? Um, but, let’s say you can still continue making this $1,500 payment. Well, instead of this having the interest only, all of a sudden, you know, you got $1,200 out of the $1,500 quickly going towards principal. So, what does that do? It really just drives down these amounts. The principal balance here, uh, they start to drop pretty significantly pretty quickly and you start getting yourself out of debt. Okay? Other times, the payment is just so outrageous um, that you can’t afford this at all. So, they’ll actually reduce the payment. They’ll get you back on your feet.
04:33 That way you have a little free money to put towards um, to put towards paying these things down, and really just quite simply to, to live and survive at this point, until you get that next job. What’s nice about this is it is credit score neutral. Okay? But, keep in mind, there will be a comment on your credit. Okay? There’s a comment section on the credit report. Okay? And, it will say something along the lines of managed by a CCC, Consumer Credit Counseling agency. Okay? That comments there, it’s a credit s- uh, it’s a credit score neutral comment. Okay? But, it’s placed there so if you try to get some credit card debt while you’re in one of these programs, they’re not gonna approve you. They’re gonna see the comments um, and they’re not gonna give you a new loan, which it really isn’t something you should be worrying about, you know, if you’re in debt and you’re trying to get more debt, don’t complain about that. It’s not a big deal. Okay? Um, also what’s nice is the disbursement. So, instead of you making payments to each of these creditors every month, they’re gonna do it for you.
05:40 So, this is you. Happy, happy, joy, joy. Okay? And, you’re gonna be sending money to the Consumer Credit Counseling agency um, each month and they will then do the disbursements. Okay? Um, the CCA will do the disbursements for you every single month. So, you’ll only have to pay one company each month. The companies will not be calling you. They’re not gonna bug you. They’re not gonna harass you. Um, it really makes life a lot easier. You have kind of a, an extra layer of protection from your creditors. Okay? So, Consumer Credit Counseling guys, um, check out some Consumer Credit Counseling agencies. You can check out the Better Business Bureau, bbb.org. You can find a list of them local to you. I would advocate you try to get into the Consumer Credit Counseling agency’s office if they have one local. If they don’t have one near you, not the end of the world, but I think there’s a huge benefit um, you know, sitting down with the agent, going through the budget together, and really taking a hard look at what your finances are. Guys, this is Nikitas Tsoukales with Key Credit Repair, and have a great day.
FCRA – What is the fair credit reporting act and why does it matter?
Your Credit Minute Show Notes:
00:00 What’s up, YouTubers? This is Nik Tsoukales with Key Credit Repair, and today we’re gonna talk about one of my favorite things in the world; FCRA.
00:08 FCRA, FCRA, FCRA. We talk about FCRA a lot here at Key Credit Repair, and if you’re wondering what FCRA, well, let me introduce you to, let me introduce to FCRA. We got the Fair Credit Reporting Act.
00:23 This is the fuel. This is what allows us to repair credit. This is what allows you to challenge things on your credit report. This is something that sets the United States apart from, um, really from everyone. There’s a reason why our system is set up in a way where we get a restart button, we can protect ourselves. Um, we have the Fair Credit Reporting Act. Okay.
00:43 There’s a reason why credit repair’s so prevalent in the United States, you can challenge things because we have rights enacted by Congress that allow us to challenge something negative on a credit report.
00:52 So, I’m gonna give you just some basic facts, but then I’m gonna talk about why this is super beneficial.
01:00 So, if you can read my bad handwriting here as always, ah, the Fair Credit Reporting Act, enacted by Congress in 1970. Okay.
01:05 And these are some of your basic rights. You have the right to know. You have the right to know what’s on your credit report. Okay. Um, someone can’t mask that information, they can’t hide it from you. If they’ve used that data to make a credit decision and you’ve been declined, they have to share that with you.
01:21 Okay. You have the right to a credit score. So, if you’ve been recently declined for something you probably got the letter in the mail referencing the Fair Credit Reporting Act and giving you a credit score, and also a range of credit scores depending on the type of credit score that’s used. They have to give that to you by law. Okay.
01:36 Then you have the big one, a right to dispute. Anything inaccurate, incomplete, unverifiable or really just questionable, you have the right to challenge on the credit report. So, it doesn’t need to stay there because it was placed there, otherwise I’d be out of a day job, right guys?
01:53 Um, also, last but not least, the right to legal action. So, if you send a dispute letter off to the credit agencies and you’re challenging something that’s just obviously inaccurate and they refuse to remove it or properly investigate it, you have the right to legal action. You have the right to take these guys to court, you have the right, um, to get paid, ah, to get, to get paid for damages. Okay. So, keep that in mind.
02:16 This is the leverage that you have when you’re doing credit repair. Okay.
02:20 Also, the FCRA is, um, something that is, um, administered and monitored by the Federal Trade Commission. Okay. So, we have a government agency that oversees this. You also have the Consumer Financial Protection Bureau that’s heavily involved in making sure that no one violates the FCRA anymore. Um, and also you have advocacy groups like Key Credit Repair and other credit repair companies that can help you challenge things that could be an obvious violation of the Fair Credit Reporting Act.
02:45 Now, keep in mind there’s gonna be a follow-up video to this explaining FDCPA, another fancy acronym we use here a lot, which is the Fair Debt Collections Practices Act. So, for those of you with that, that’s gonna be the acronym that you wanna follow, especially if it’s questionable debt.
03:01 The Fair Credit Reporting Act is quite clear. Also keep in mind with the FCRA, something to think about is, you know, you have the right to challenge these things but it doesn’t have to be vague. Okay. And when I say vague it means we have some clear guidelines for how long these companies have to respond.
03:19 So, when you send out a dispute letter, you’ll probably hear the rule of thumb that we have 30 days, we have 30 days for an investigation. Where does this 30 days come from? Well, it’s actually in the Fair Credit Reporting Act. Okay.
03:33 I’m gonna supply the link for you guys, um, to Wikipedia, okay, where you can actually see a history of the Fair Credit Reporting Act, see why it was created and why. Okay, you can see some of the furnisher information, um, some of the uses of consumer credit reports, of permissible purposes as well. Okay. So, someone just can’t pull a credit report because, ah, they want to. They have to have permissible purpose.
03:54 So, I’m gonna list that out for you, as well as giving you a link for a free PDF download at, um, keycreditrepair.com/credit-laws. Okay. You can actually download a full PDF version of the Fair Credit Reporting Act. Especially for you, for those do-it-yourselfers, if you wanna get some ammunition when you’re, when you’re creating those letters, you can get them right there.
04:16 Thanks guys. This is Nik Tsoukales with Key Credit Repair. Have a great day.
Home Loan – What credit score is used in your application?
Your Credit Minute Show Notes:
00:00 What’s up YouTubers, this is Nick Tsoukales with Key Credit Repair. And today’s credit question of the day is gonna be “Which credit score is used when I am applying for a home loan?” So pretty simple stuff, okay.
00:10 So let’s say for example we have a 750 credit score for Experian, okay. We have a 732 for Equifax, and then we have a 740 TransUnion, okay. A lot of people are gonna think, well Nick, it’s the middle credit score. Well, it sometimes is the middle credit score, so that’s not entirely incorrect, but in this case, the middle credit score would have been a 732, which is technically the lowest credit score, okay. So it’s definitely not the 732, okay. I mean it’s definitely not the lowest credit score, and it’s definitely not the highest credit score. A home loan um or a mortgage lender is gonna use something called the median credit score, or middle of three values. So in this case, what you’re gonna look at is you’re gonna stack up the three credit scores, okay. And you’re gonna look for middle of three values. So in this case, we have 740. So this is obviously the lowest, this is the highest, and this is the middle of three values.
01:01 So again guys, if you’re pulling your credit score, wondering which one is used for a home loan, it’s always gonna be the middle of three values. The credit score that you need for a home loan is always gonna be a FICO score, and the place to get that FICO score, aside from a mortgage lender is gonna be myfico.com.
01:15 Guys have a great day.
Does Debt Settlement Hurt Your Credit Score?
Your Credit Minute Show Notes:
00:01 YouTubers, what’s up? This is Nick Tsoukales with Key Credit Repair. Today we are talking about debt settlements. So the big question that we’re getting asked all the time is debt settlement, de-debt relief. Is it, is it hurting my score? Will it hurt my credit score? So let’s actually break down what a debt relief plan is, what debt settlement is, how it happens, and whether or not it hurts your credit score, okay?
00:23 So typically a debt settlement plan, okay, is a plan where you are going to start setting aside a certain amount of money into a special purposes savings account, okay? Now with the savings account, as the money starts building up, okay, that money that-that savings, okay, is gonna start being used to settle each of your debts, okay.
00:50 Now what are the major pros with a program like this? Well the first big thing is the savings, okay. Now let’s say you have a ten thousand dollar debt, okay. The debt settlement company typically is gonna negotiate a pretty aggressive settlement with this company, okay. So let’s say we have a debt collector, okay. Um that-that settling company is technically is going to be settling the debt somewhere between four and six thousand dollars, or somewhere between forty and sixty percent, so you have major savings.
01:28 Now what is the downside, um with a debt settlement plan? Okay, well really there isn’t. As long as you’re in collections. So let’s say you-you’ve already fallen behind on all of your … uh on all of your accounts, okay? You’ve gone through some hardships and all of these accounts are currently in collection status. Paying the off through a settlement, bringing them to zero is going to help your credit score. It’s a positive thing for your credit, okay. These accounts are already in default.
01:55 Now let’s say these accounts are all up to date, and you fall behind, okay. You go ninety, a hundred and twenty days late, to use that at leverage to possibly negotiate a settlement, something like this later on, obviously that’s gonna have a damaging affect on your credit score, okay. Keep in mind guys, we talked about this, thirty five percent of your credit score is payment history. So the second you go ahead and you fall behind on those debts, that thirty five percent is gonna be affected pretty dramatically. We’ve seen clients go from 750 to 550 in one month from falling behind on all of their accounts.
02:32 Now if you’re looking to file for bankruptcy, this is an alternative, okay. This is a a great alternative, okay. Also, let’s break down why this can actually happen. Okay? Typically when these debts go ninety to a hundred and twenty days behind, these debts are gonna get sent over to a collection department at a bank, okay. They will start aggressively reaching out to you to try to get you to pay on the debt, okay. Usually you can get something off with each of those accounts, so if it’s a ten thousand dollar debt, maybe you’re gonna get a couple thousand dollars off, okay. But if some additional time passes by, those debts are then gonna get sold, okay. And when they get sold, this is where you can start saving the bucks. Okay.
03:17 A ten thousand dollar debt, a credit card, okay, is typically sold to a collection agency for about a thousand bucks, I’m not kidding you. Ten cents on the dollar, okay. Now keep in mind, a lot of these debts never get collected, okay. So they’re usually not gonna give you a thousand dollar settlement. But when you end up paying them back-
03:42 Sometimes you don’t.
03:42 Five thousand dollars, or fifty percent, okay, it works out for everyone. The collection agency made some money, technically. They’ve made four thousand dollars, okay. They’ve recovered some money from you for all the debts they’re not gonna collect, for all the people that are filing for bankruptcy, you’ve saved a ton of money, um they make some money, everyone is happy. The original creditor up here um they took a write off on the loss, okay. So they took a tax deduction for their loss as well, so it all works out well in the end for everybody.
04:16 But again, if you’re up to date on these debts guys, a debt relief program is something you’ve really gotta think about. It should only be deemed as something to avoid bankruptcy, um if the debts are-have already fallen behind, um whether you paid it off in full or settling the debt, it’s a net positive, the account is already in default, it’s already in negative balance, bringing it up to date in any way shape or form can only help you.
04:38 Guys this is Nick Tsoukales from Key Credit Repair, thanks for checking out our uh our YouTube channel and our Facebook channel, um everyday we’re producing uh new content regarding credit. If you have any questions that you’d like me to answer, you can email me at info@keycreditrepair.com. Thank you.
Credit Score Range- How do I stack up?
Your Credit Minute Show Notes:
00:01 Hey, guys. This is Nik Tsoukales with Key Credit Repair. I’m taking you through a quick credit minute talking about the different credit score ranges. So, I’m going to break it down in three different ways for you. Okay.
00:11 The first credit score that we have is something called the Vantage score. Vantage score 3.0 or 4.0. Okay. Then, we have your FICO score. Um, typically what you’re seeing online is FICO 8 and FICO 9, and then I’m going to give you an additional FICO score as a bonus round. This has a little house on it, and I’m going to explain in a second why this matters.
00:40 So, the first thing we’re going to talk about is the Vantage score. Okay. What is a Vantage score? Where do you get it? Okay. Vantage score is the credit score you’re going to find on creditkarma.com. It’s a free credit score that you can access. Okay. The Vantage score is owned by the three credit agencies. It’s owned by TransUnion, Experian, and Equifax. Okay. Um, it is an educational purposes only credit score. Most banks and lenders don’t use it, but for the purpose of credit repair, monitoring your credit, it’s a really good range.
01:11 So, I’m going to actually read off some notes here for you guys and give you the exact break down directly from FICO in terms of where we should be. Okay. So, to me directly from Vantage score. So, you have, okay, let’s see. We’re going to go from 300 to 600, that is considered a poor credit score in their eyes. Okay. Then, you’re going to have 601 to 660, which is considered a fair credit score. Okay. Then, we’re going to go 661 through 780, which they consider good, and then 780 plus, which they consider excellent.
02:04 Now, keep in mind, this is for educational purposes only. So, if you’re in these ranges, um, you’re doing pretty good. If you’re in this range, you’re really doing amazing. Okay. Uh, let’s move on to FICO score. Okay.
02:23 So, one of the most commonly found FICO scores online for educational purposes only is FICO score 8.0 or 9. Okay. And, their range is going to be fairly similar with a few exceptions. 300 to 579 is going to be what they consider as poor, and then we’re going to say 580 to, let’s see here, 669, and by the way I’m going to show you in a second why I could care less what they say. This is an important part of this. I could care less what these numbers are. 670 through 739 is considered good. 740 plus is considered excellent. Okay. And, by the way, this score caps out at 850.
03:22 Now, I could care less what Vantage score says is a good credit score or a bad credit score, and I could care less what FICO score or FICO 8 says is a good or bad credit score. So, we’re going to go ahead and we’re going to throw all of this out. We could care less. What we care about is what we can get with our credit scores, and most of my clients are trying to eventually buy a home, and if you’re buying a home, you’re not using either of those two credit scores. Those are just for educational purposes only.
03:48 What we care about is another [inaudible 00:03:53] FICO. We’re going to call this the house FICO score. Okay. So, when you go to get a mortgage, uh, the mortgage lenders going to pull something called a trimerge credit report. Okay. That data- When they pull that data in, they’re going to push it through, uh, the FICO algorithm and issue you a score, okay, but the way the scores presented to you is going to vary between the three bureaus. Okay. So, you could have the exact same data between all three bureaus, and there’s a variation natural algorithm that’s used that’s why no three credit scores are exactly the same. Interesting stuff here.
04:32 Experian, they’re using a version two. Okay. Equifax is using- using version five, and TransUnion is using version four. If you’ve ever heard of a Beacon score, guys … Some of your old school bankers will know this. They’ll say, “Hey, what’s your Beacon score?”. Okay. In the old days, your Equifax credit score was called a Beacon score. Now, these credit scores are all from FICO. Okay. These are the scores that matter. This is what the banks and lenders are using.
05:05 Now, let’s talk about the ranges. In terms of what is considered good or bad, I mean, it’s kind of arbitrary. What I care about is what I can access with my credit score. Okay. So, I’m going to give you a few numbers to focus on. 640, 680, and 740. Okay. Goal number one, goal number two, and goal number three. Okay. Now, obviously, these scores range from about 300 to 850, but again we could care less about that.
05:35 What I care about is this … 640 is a goal number one for the majority of my clients. Why? Because that’s going to allow them to access most, um, FHA back loans. So, essentially, you’re getting a house around 640. Now, there are some banks and lenders that will go lower than that. They’ll go to 600 or even 580, but there’s usually contingencies and more complicating factors that they want to get you that loan, but 640 you’re- you’re in. You’re approved. You’re getting something pending all the other things are- are working out in your favor. Okay.
06:04 680 is just about the national average. Okay. I care about that. I want to know that I’m at least average. I don’t want to be below average. Okay. Also, that’s technically the beginning of most conventional findings. Conventional findings means basically what they’re not looking for the Federal Housing Administration, conventional money. Uh, they’re not looking for the Federal Housing Administration to back your mortgage. Okay. So, usually the rates, the fees are going to be lower. Okay. You’re just going straight to the bank. They’re saying, “Hey, you’re- you’re average. You’re making a living. Let’s give you a regular loan”. Okay.
06:42 And, then 740. 740 is considered really that crème de la crème at the bank level. When they see a 740 plus at that FICO score, that Beacon 5.0, that FICO two or that version four, that’s a credit score that’s going to get you the lowest interest rates. That’s what you’re going to be able to really competitively shop from one bank to another. That’s when you’re getting the best interest rates on things like credit cards, the zero percent APR offers, zero percent on a Cadillac for 12 months offer, all that good stuff. That’s where you want to be.
07:15 So, regardless of what a website is telling you guys. Good, fair, bad, excellent, green light, red light, 10 stars or none, we can care less. What we care about is what is your credit score getting us? Is it getting us a house? If not, then who cares. Guys, this is Nik Tsoukales with Key Credit Repair and this is your credit minute. Have a great day.
Free Credit Report-How do I get one?
Your Credit Minute Show Notes:
00:00 What’s up, YouTubers. Today, we’re gonna talk about a subject that we, uh, we talk about a lot here at Key Credit Repair, and it’s probably one of the most searched, uh, credit queries on Google, and it’s, uh, and excuse my bad handwriting, uh, free credit report. Okay. Where do I get my free credit report? How do I get one? What website do I go to, or you think you’re getting a free credit report, but actually you’re not, so let’s talk about free credit reports, guys.
00:28 So, I’m gonna give you guys where you can get your free credit report, how to get it, what the catches are, what the gimmicks are, because, trust me, there are a lot of them. Okay.
00:41 So, what’s the deal with these credit reports? Well, number one, the United States government has allowed you, the consumer, access to your credit reports through the three credit agencies, once per year, for free, unless you’ve recently been declined, which you can actually request them again. Okay?
00:56 Now, where do you access this? Well, technically speaking, there’s only one website. There’s only one, guys, where you can access all three credit agencies completely free of charge, but I’m gonna give you the catch. Okay? So, that website is going to be annualcreditreport.com. Okay. Annualcreditreport.com. Okay.
01:24 Now, when you get to this website, it’s gonna give you the ability to pull your Equifax, okay, your TransUnion, and your Experian credit data. Okay. You’re gonna get everything. Every nook and cranny of that data, you can get once per year for free. You can download it as a PDF. You’ll have access to it forever and ever. Okay. It’s a great thing, and it’s extremely detailed.
01:46 Once again, what’s the catch, though? The catch is no one said in any of these laws that your credit score is free. There’s no credit score. Okay. No score. Okay. Now, there is the option, through each of the bureaus when you’re, when you’re accessing that free data, to upgrade and pay somewhere between eight and ten bucks per credit score, okay, but if you’re just looking for the data, you wanna see what’s on there, it’s very much recommended. Okay.
02:14 Now, if you wanna go one step further, you wanna get some of your data or as much data as you can, plus credit scores, okay, or some sort of credit score, and you have another site that’s super popular these days, and one we tend to recommend a lot because we like how usable it is, and you have Credit Karma. Okay. Credit Karma’s gonna allow you to access your TransUnion credit data 100% free of charge, okay, your Equifax credit data, and you’re not getting your Experian data. That’s one of the catches. Okay. Also, you are getting credit scores in the form of something called a Vantage Score. Okay. So a Vantage score is a credit score that’s used for educational purposes only. It was created by the three credit agencies. It’s owned by the three credit agencies. Banks and lenders do not use it. 90% of credit decisions are made using what? FICO scores. So Credit Karma’s a good report. We like the monitoring. We like it, but realize you’re not getting everything. Okay. You pay for what you get, and you’re not paying anything here, so you don’t get everything. Okay.
03:28 The other website that we like is freecreditreport.com, but another catch. Here’s the other catch, guys. It’s freecreditreport.com or freecreditscore.com. You are only getting free Experian data. Okay. Equifax, you get nothing. TransUnion, zero, zip, zilch. Okay. And, usually, you’re gonna get some sort of a score. Um, I’ve seen them offer FICO or usually FICO 8 or 9, which banks and lenders, of course, they’re not using it yet. Most mortgage companies using FICO 4 or FICO 5, um, or they’re using their plus score. Okay.
04:27 So, if you want the free data, just the data, annualcreditreport.com. Okay. You can get an upgrade and you can pay for it to access scores, but there are no scores. Credit Karma’s gonna give you TransUnion, Equifax, and a Vantage score, which is really good for educational purposes only. Um, you get a free app, as well, and the credit monitoring alerts are really good. Okay. Um, another thing negative with Credit Karma, something I don’t like is the fact that I’m constantly being marketed. Okay. Keep in mind they’re not charging you anything. They need to make money. So, every time you log in, guess what? There’s a banner for Amex, there’s a banner for Visa, there’s a banner for this, that, and the other, and I don’t like the fact that my data is out there in that way, although it’s out there anyway somewhere, right? Um, and then we have freecreditreport.com, which is giving you Experian data, plus one credit score. Okay.
05:15 Now, that’s where you’re getting some free credit reporting. Now, what is the common theme here? If you want it all, you must pay. Okay.
05:29 One thing I tell every single one of my clients, “Stop being cheap. Pay for credit monitoring. You will pay for all types of warranties, all types of things. You will pay all types of counselors, advisors, and coaches, but you will not shell out 20 or 30 bucks per month, $360 per year, to monitor all three of your credit agencies, to check all three of your credit agencies, and to look at and monitor all three of your credit scores.” That’s financial insanity. Okay.
05:58 If you wanna look at exactly what the banks are, uh, and lenders are looking at at all times and you’re willing to shell out the cash, and credit is important to you, then my suggestion, and you guys will see this a lot, this is not for cheap people, is myfico.com. Get on there. I think their three-in-one membership right now is somewhere in the ballpark of 30 bucks. All three credit agencies, all three FICO scores in every variation of the FICO score. Remember, guys? FICO 4, FICO 5, banks and lenders, mortgage companies, that’s what they’re using. FICO 8, FICO 9, they’re not using it. We could care less if we’re getting that score for free. Um, you also have auto lending scores, credit card scores, insurance scores. You got everything on there.
06:46 So, guys, that is your explanation about free credit reports. All right? This is Nik Tsoukales with Key Credit Repair, and this was your credit news for the day.
Good-Will Intervention-Asking Nicely will Help Improve your Credit.
Your Credit Minute Show Notes:
00:00 What’s up guys? This is Nik Tsoukales with Key Credit Repair. Today we’re going to talk about something a little outside of the box, something a lot of people really aren’t talking about in the credit repair field, um, and it really is a creative way to help you start repairing your credit. Okay?
00:15 So, obviously, we get the question a lot. “Late payments. Late payments. What do I do with my late payments? I can’t get them off. I can’t get them removed.” Um, well there is a way to get this done. Okay? Keep in mind, one of those ways is by challenging the data. Okay? Is it verifiable? Is it accurate? If it’s not, it’s gotta go. Okay? Being persistent with your attempt at getting these things removed when they can’t be verified, when it’s garbage. Okay? The item shouldn’t be on your credit report.
00:44 Well, let’s say, you’ve have some siter, some sort of minor blip with a company. Okay? They placed the late payment on your credit report, but really is more for technical reasons that it was late. Maybe one of their systems wasn’t working, but the account did, in fact, go late. You don’t have much you can necessarily challenge. Well, what do you do then? Okay. The, we got a question, actually, yesterday from a client who’s dealing with some student loans in this way. Where there’s really more of a technical issue that created the lates.
01:09 The lates were, in fact, lates. Okay? The money didn’t get to them on time. But really, should that affect their credibility? And that was kind of a question mark? Um, also, this outright disputing the account really hasn’t worked, um, for this client. They’ve actually attempted to do it themselves. And they wondered what is a plan B? And that’s what I want to lay out for you guys, which is something, again, a little outside the box. Okay?
01:35 And what we’re going to talk about here is something called a good will intervention. Okay. We are taught to fight, we are taught to never surrender, we are taught to go after the big, bad credit agencies and our creditors. We’re taught to take ’em down, right? But you don’t always have to. Sometimes, you can actually ask nicely. Okay? If you’ve had a really good run with a creditor, um, a bank, a lender, everything’s been going well, but because of some sort of technical issue or something really in the gray, a late was incurred, okay, you don’t necessarily need to challenge their record. What you can do is you can challenge the creditor to be nice to you, in the form of something called a good will intervention.
02:22 And what a good will intervention really is, asking the creditor to remove the late out of their good will. Okay? Understanding that the issue was really technical and has nothing to do with your credibility. Okay. This is an option in the way we help clients all the time, when the late isn’t something they really agree with, but it’s not necessarily black and white. Where instead of just challenging the record, disputing it outright, when that’s really not the way to do it, um, we’re asking the creditor politely, “Hey, can you make this adjustment? This didn’t, in fact, uh, uh, really feel like it should be a late payment, and it’s something that’s really fallen into a gray area.”
02:57 So a good will intervention is a great way to approach this. And it’s extremely effective. And, if a company’s doing really good business with you, okay, and you’ve been a client of theirs for a long, long time, they’re really going to want to help expedite you. They’re really going to want to help, uh, accommodate you when, uh, when a mistake like this happens, from whether it’s their fault or yours, long as your in agreeance that you were, uh, actually, in fact, able to make that payment, um, and that there is not effect in terms of credibility here.
03:25 So good will intervention is going to be the way to go, guys. There’s a lot that goes into this, so keep in mind, something you definitely want to speak to one of our credit experts about. I really wouldn’t go at this specific approach alone, okay? Letters gotta be written a certain way, um, you want to appeal to them a certain way, so I would definitely, um, this is not one of those do-it-yourselfer tips. I would reach out to one of our credit experts. You can click on one of the links below. There’s probably a few consultation link below, or learn more link below, if this is on Facebook. Or you can check us out at keycreditrepair.com\freeconsultation. Give us a call. Ask specifically about the approach with the good will intervention, and we’ll discuss it with you and see if that’s actually something, uh, that is an option for you. Because we don’t want to just start doing this stuff blind.
04:11 Guys, this is Nik Tsoukales with Key Credit Repair. Have a great day.
Car Shopping-Why do I have so many inquires?
Your Credit Minute Show Notes:
00:00 YouTubers, what’s up? This is Nik Tsoukales with Key Credit Repair. Guys, awesome question of the day, super duper popular question, so if you’re wondering about this, I’m going to break it down for you. So, the question of the day is: Why is it when I go for a car loan, I end up with dozens of inquiries although I only went to one dealership, one finance manager, one place, okay? The reason for that, really, is, um, um, in most cases, it’s, uh, it’s your credit, okay? So, let’s say the dealership is, uh, Toyota, okay? You went to an official Toyota dealership and you’re expecting them to run the financing option through Toyota Financial, but you can’t get approved because of a credit issue, okay? All of a sudden, the dealer, uh, needs to shop that deal around, okay?
00:45 So, typically what they’re going to do is they’re going to take that application and they’re going to submit it to a bunch of different, uh, lenders. They’re going to submit it to credits unions. They’re going to submit it to, um, car loan companies. They’re going to submit it to Chase, this company, that company, um, and they’re going to shop that deal for you just like a mortgage broker would shop the deal for you, okay? And what’s going to happen, each of those companies, in order to give you a proper quote, uh, in order to give you an accurate, uh, rate, what they’re going to do is they’re going to pull credit within their own automated underwriting systems, um, and if it’s approved, obviously they’re going to issue that approval, okay?
01:20 Uh, when this happens, you can get, you know, you can get five increase, maybe even a dozen increase. It really depends on how many banks the lender has submitted that application to. There is software now as well that will actually do that- that submission to multiple lenders at the same time, so sometimes it’s literally just the finance manager clicking one button in their, uh, in their software that submits it to all those banks. Now, here’s the good thing, okay? I know you’re scared now. You’re scared to go to the car dealership, okay? But, just like always with inquiries, we’re going to turn that frown upside down, okay?
01:55 Let’s actually talk about why this is no big deal, okay? It’s no big deal because FICO has stated that multiple similar inquiries for the same purpose have no adverse effect on their credit score. Why? Because they know you’re shopping for a deal. You’re, quote/unquote, rate shopping, so those multiple inquiries from that car dealership or that home lender or whoever’s shopping a deal for you with various banks, that those inquiries are going to be counted as one inquiry, okay? It’s not going to hurt your credit score.
02:27 Now, if you do this once a month for the next year, that could cause some adverse actions in your credit score [inaudible 00:02:33] because there’s a perception at that point that you could be a flight risk of getting some weird financing or doing something funny. Um, but regular car shopping, guys, there’s no drop to your, uh, credit score. Shop around, get the best deal, let the car dealership, uh, do its thing. Thanks, guys. Nik Tsoukales with the Key Credit Repair. Click below to learn more and to find out more about our company. Thanks, guys.
Should I file for bankruptcy?
Your Credit Minute Show Notes:
00:00 What’s up, everybody? This is Nik Tsoukales with Key Credit Repair. Today, we’re gonna talk about a word that has a super negative association, a word that people don’t really want to talk about, and that’s gonna be ‘bankruptcy’. Okay, so we get the question all the time: should I file for bankruptcy? And obviously for the sake of fair disclosure, we have to tell you we are not attorneys, we are not bankruptcy attorneys. What we are is credit repair specialists, but there are some very simple things to consider when you’re, uh, thinking of doing a bankruptcy, okay?
00:29 First of all, let’s talk about what a bankruptcy is guys, okay? So sometimes, we just use this one word, ‘bankruptcy’, but there’s, there’s more that goes into this. Okay, if you actually look up ‘bankruptcy’ in the federal court system, you’re gonna see what a bankruptcy is, is a protection, okay? So, the full phrase is gonna be ‘bankruptcy protection’, and what it is, is you getting protection from creditors when your finances have gone a little out of whack, okay? Recently, you’ve probably seen 50 Cent, a guy who’s worth, uh … You know, he’s been on the Forbes list of over $100 million and he had to file for bankruptcy. How does this actually happen and why should this happen?
01:12 Well, there are a couple of different types of bankruptcies, okay, and I’ll give you the pros and cons of both, and a couple of different super simple ways of thinking about this and approaching them, okay? So personally, you have Chapter 7 as an option and Chapter 13 as an option, and these are probably the two most common bankruptcy. Chapter 7 is really a full discharge of all of your debt. So, you can’t afford your debt, you’re falling on hard times, and what happens is you go to a, um … You go to your local bankruptcy attorney, they’re gonna file a petition in bankruptcy court, they’re going to get you protection from those creditors, from those creditors harassing you, okay, and then the judge is going to approve wiping out all of those steps. Those creditors will charge off those debts. They won’t get any payment from you, okay, and you’re gonna get a clean slate financially.
02:03 Now, that doesn’t mean you’re necessarily gonna get a clean slate in terms of your credit. Keep in mind that a bankruptcy is a ten-year mark, okay? Ten years and any time you apply for something, they’re gonna ask you, “Have you, uh, filed for bankruptcy in the last ten years?” It’s quite common. I mean, even if it doesn’t come up on your credit report, most applications are gonna have a little checkbox. Keep in mind, even if it doesn’t come up on a credit report, it does come up on a public records search because a Chapter 7, a Chapter 13, any sort of bankruptcy is a public filing. That information is accessible by the public, okay? It doesn’t mean they’re putting that information on a billboard. No one’s to see it. (laughs) But, it is there in the court’s records, okay?
02:45 The second type of bankruptcy that is extremely common is Chapter 13, and one type of bankruptcy that I really think is almost silly for most people. A Chapter 13 is a reorganization of your finances. So, let’s say you have, you know, 15 credit cards, um, you’re a business owner, things falling apart, you’ve, you’ve put yourself on the line personally. Things, things are, are, are … The business didn’t go well and now you’re on the hook for all of these credit cards, okay? But, the business is still going pretty well, okay, or maybe not as well as you want, but it’s still there, it’s still viable. Okay, that’s usually when you file for Chapter 13, and the Chapter 13 works a little bit like … Kind of like a debt consolidation or almost like a debt relief plan, okay?
03:27 So, let’s say you have these multiple creditors here that you have to pay, okay? Well, instead of paying them, you’re gonna be paying the court. You’re gonna be paying through a trustee. Okay, this is you. You’re gonna be sending money every month. That money or that amount is gonna be determined by the bankruptcy courts. It’s gonna be an amount that you can afford, okay? And then, the court system is gonna be distributing to each of your creditors until each of those debts have been paid off. That’s usually done over the course of a five year period, sometimes faster. Okay, keep in mind, though … Okay, let’s say you owe $100,000 in debt, okay, and you’re paying off this Chapter 13. You’re gonna pay that, plus court fees, plus attorney’s fees, okay? So, this could quickly turn into $115,000 in debt. I’m not a huge fan of a Chapter 13.
04:28 Okay, the only time in Chapter 13 really works is if you’re self-employed, okay? Um, if you’re not self-employed, typically what I suggest is some sort of a debt relief program, and a debt relief program works very similar to this, and the only difference is you’re gonna send your money into a debt relief company. That company is actually gonna save up that money with you, okay, and then they’re gonna use that money to negotiate settlements with each of those creditors, so that $100,000 that you owe could quickly turn into $50k. So, debt relief companies do a great job of negotiating down settlements, and as long as those fees makes sense, um, and they’re affordable and the company’s performance based, meaning they’re only making a percentage of how much they can save you, it’s a grand slam, okay?
05:17 The cons of that are it doesn’t offer you protection against those creditors. They can still call you, they can still harass you, they can still chase you, they can still sue you, whereas a bankruptcy, again, it’s ‘bankruptcy protection’, okay? You have protection from the court system. Those creditors cannot contact you, they can’t reach out to you, they can’t harass you. That stops. The court tells them, “Cease and desist. We’re handling things from here on end.” Okay? So, keep that in mind. So again, guys, get Chapter 7 as the big one. Chapter 13 is the one I don’t really like too much, okay?
05:50 Um, also, another suggestion is, you know, if you’re a consumer debt or if you’re, if you’re just a consumer, you’re not self-employed, okay, you’re not on the hook for a bunch of business debts personally, then che- Then, bankruptcy is something you really want to think, uh, you really want to think about, okay? If you’re on the hook for $4,000 or $5,000 in, in, in debt, um, bankruptcy might not be the move for; debt relief might be the move for you, okay? Um, consumer credit counseling might be the move for you. Okay, so I’d probably want to explore those options before I even consider speaking to a bankruptcy attorney, okay? Um, and the big reason is, again, that, that bankruptcy’s gonna stay on your credit report for ten years. That’s a pretty big mark, um, and it’s gonna follow you around for a long, long time, okay? What’s interesting, by the way, is I’ve had some people approach me and ask me: should I file bankruptcy, um, even though a debt is six years old? Okay, so the debt is six years old, but it’s big. You know, it’s $30k and all of a sudden, they’re just now getting harassed for the debt. The debt was fairly dormant and they’re wondering, “What should I do?” Well, in a scenario like this, okay, bankruptcy’s not a good idea because six years, this debt is gonna border the statutes of limitations.
07:05 If you’ve seen from my previous videos, depending on the state that you live in, guys, you could have a six year statutes of limitations where the debit comes un-collectable. You get up a five year/four year, um, and their basic reporting is only seven years, seven years plus 180 days from the date of last delinquency, so basically seven and a half years, okay? So, don’t go ahead and start paying attorneys to file bankruptcy and do all this crazy stuff if they’re just calling you, okay? You might actually want to stall a little bit if that debt is going to expire in the next month or so, or if it’s, uh, if it’s already expired, based on your state’s statutes of limitations, that’s worth a dispute and a cease and desist to that creditor, telling them, “Hey, you know, beat it. This, this is, this is a dead issue. You’ve written this off many years ago.”
07:50 So, guys, this is Nik Tsoukales with Key Credit Repair. Any additional questions regarding how you should approach or finagle bankruptcy versus credit repair versus debt relief, that’s a question our consultants can, can help answer all day and we can steer you in the right direction. Have a great day.
Does Paying Off Collections Improve Credit Score?
Your Credit Minute Show Notes:
00:00 [inaudible 00:00:00] here with Key Credit Repairs. Today we’re gonna answer a simple question which is, will paying off a collection hurt my credit score? Could paying off a collection hurt my credit score? So paying collections, good or bad? So let’s break it down to a science. The question is not as simple as a yes or no. So it’s gonna depend on a couple of things.
00:20 So when you pull up your credit report you’re gonna notice a couple of very particular dates, okay? And there’s a difference between them. Okay? You have the date of last activity, okay? And the date, excuse me, the date last reported, okay? So obviously you do wanna pay things, okay, you wanna make sure you’re up to date on all your bills, but let’s say you’ve had a collection that’s fairly dormant. The account is fairly old, okay? Let’s say it’s three years old at this point, and you notice that the date of last activity on that account is 9 of 2014 and then you see the date last reported is 10 of 2018. So that’s typically a debt that is safe to pay off, okay?
01:24 And the reason for that is, number one, the date last reported is fairly current, okay? So paying it off isn’t going to drop your score, okay? It’s not a dormant account, it’s an active account, okay? So the reported date is the last time that the collection agency transmitted a signal into the three bureaus.
01:40 So here is the collection agency. And they have sent the signals to Equifax, TransUnion, and Experian updating this account, hence the recent date. We’re actually in October of 2018 right now. Okay. The date of last activity though, 9 of 2014, that’s the last time that any money was transacted on this account. So let’s say you made a payment to this debt collector in September of 2014. That’s what you’re gonna see there, okay?
02:10 Now, let’s give you another scenario of when you probably might want to question paying back the account, okay? So let’s say the date of last activity, actually, we’ll keep it the same. Let’s say the date of last activity is September of 2014, okay. But, the date last reported is September of 2015. Now this is where it gets a little funky, okay? ‘Cause right now we have a fairly dormant account. That creditor, that collection agency hasn’t reported the item to the um, to the credit agencies in a while, okay? So the information hasn’t been removed but they’re not actively transmitting a signal to the credit agencies. So, where you typically have this, in that last scenario where they’re transmitting that signal, there’s been none of this since September of 2015, okay?
03:09 So this is where you’re gonna question paying off this debt. In some rare cases, okay, and this, by the way, is quite rare. With technology these days these accounts are typically updating on an automatic basis every single month. It’s done through automation, no one’s really thinking about it, no one’s hitting a button, okay? But in some rare cases, where you’re paying off a debt that is this old, you’re waking a sleeping giant, okay? And what happens is that date last reported is brought current, the recent derogatory remark is brought current, and you can actually see your credit score drop.
03:41 Um, we typically have a 90 day lockout period on all open collections where we tell our clients just hang tight for 90 days. Don’t do anything. Let’s challenge them, let’s request validation on these accounts, let’s make sure if you-if you are gonna pay something, even if you agree with the original debt that you’re paying back the right person, that they’re legitimate, that they can document that they’re licensed to collect on that debt in your state, so on and so forth, and they can follow all the rules and procedures under the Fair Credit Reporting Act and the Faraday Collections Practices Act to protect you. Um, so kind of a mandatory lockout period of 90 days just to make sure everyone’s doing the right thing and everything’s validated, and then at that point you can go ahead and start paying off the debts.
04:18 Um, if you wanna talk about a paid for deletion clause in the uh, when you’re paying off the debt or settling it that’s something we can absolutely assist you with.
04:26 Guys, this is Nick Tsoukales with Key Credit Repair. Have yourself a great day.
