Car Shopping Inquires

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

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.

 

Credit Karma Vs. Everyone

Credit Karma Vs. Everyone

Your Credit Minute Show Notes:

  • 00:00                                   Hey, what’s up YouTubers, this is Nick Tsoukales with Key Credit Repair. Guys, today we’re going to talk about credit karma. The question I’m getting consistently is, “Why is my Credit Karma credit score, so much different from what the banks and lenders are using?” Everyone’s going after Credit Karma these days online. Every blog is talking about Credit Karma, it’s the free site, everyone’s using it, and we’re going to call this video Credit Karma Versus Everyone. Okay? So let’s break down why your Credit Karma score is different. And there really is a very specific reason why your Credit Karma score would be different than what the banks and lenders are using, and the main reason really is the scoring formula. So keep in mind, you have various different scoring formulas out there. Okay? The one I always talk about is going to be our good friend, Mr. FICO. Okay? The FICO score invented by Fair Isaac Company, that has always been the crème de la crème. That is the scoring formula that every bank and lender is using for pretty much everything.
  • 01:01                                   The latest version of FICO is FICO 9, produced in 2016. Um, it’s a scoring formula that banks and lenders really aren’t using, okay. Most mortgage lenders, for you guys trying a home loan are using FICO 4, FICO 5. It’s an older version, it’s got to be a good 20 years old. Uh, but FICO is what the banks and lenders are using. Okay? Now, and then obviously they have you know, FICO 8 and FICO 9, those are for educational purposes only. Keep in mind, there are a good five or six different recent versions of FICO that are used for different purposes as well, there’s the car lending score, the auto lending score, so on and so forth. But we’ve covered that before. Okay? Um, Credit Karma is not using FICO guys, it’s using something called Vantage. So your VantageScore, excuse my bad handwriting, so you’re wondering, what is the VantageScore?
  • 01:55                                   Well, a few years ago, the three, the three credit agencies, you have the big three. Experion, TransUnion and Equifax, okay, they got together and they actually created um, they formed a team and they created this new scoring formula called VantageScore. Okay? The reasons behind it, eh, you’ve got to wonder. I would say probably a big reason if I was in the scoring uh, business, would be to really bypass the licensing fees that they were paying to FICO every time they used FICOs algorithm, because essentially what they’re doing is they’re paying FICO a fee to use that scoring formula. So essentially what it is, they came up with their own formula. Okay? That formula is showing up on all types of websites. The first website that we really show AdvantageScore show up in, show up on, was a website called truecredit.com. For any of you that have been monitoring your credit for more than a decade, you probably remember TrueCredit. TrueCredit was TransUnion’s credit monitoring site and it was super-duper popular and pretty inexpensive. It might even still be up right now, but typically most people are accessing the TransUnion data directly through TransUnion.
  • 02:57                                   Now, when Credit Karma showed up to the party, they were offering a free credit scoring formula. They were doing it in conjunction with TransUnion, so they were offering the VantageScore pretty much automatically. Okay? Uh, they’ve now taken on Equifax as well, Equifax is also using the VantageScore through Credit Karma. Um, the one agency you don’t have on Credit Karma is Experion, which is okay, it is for educational purposes only, but again, there is going to be a difference between that FICO scoring formula and the uh, VantageScore. Okay? The main difference really, and I’m actually going to pull up these stats, is going to be payment history. Okay? So your FICO scoring formula is going to account for payment histories 35% of what makes up the credit score, whereas Credit Karma or VantageScore is going to take it into account as 40%. Okay? FICO score, you’re going to use 30% as a percentage, how they weigh debt, and VantageScore is going to use 21%. So even that is going to be slightly different. Okay? Also you have uh, total balances are broken down to 11%, recent behavior 5% um, and extremely low weight available credit 3%.
  • 04:04                                   So the way they do their algorithm is slight different. It’s not going to be a massive difference in most cases. Uh, VantageScore’s original formula was drastically different from what FICO was using. These days, it’s almost a perfect match. So if you’re using Credit Karma, okay, continue using it. It’s a good little system, it’s free of charge, so I’m a big proponent of free credit monitoring services. It allows you to be in tune with what’s going on in your credit at all times. But if you’re really serious about accessing any sort of financing in the next even six months, I would suggest you move your credit monitoring um, over to a paid site. I’m going to give you a couple of them that are really, really good. Okay?
  • 04:46                                   One of them is going to be myfico.com. Okay? Myfico.com is FICOs actual credit monitoring service. This the theirs guys, okay. It’s not cheap, though. The three-in-one uh, credit monitoring through myfico.com is somewhere in the vicinity of $30, $40, depending on which options you pick, so it is really pricey. But, when you access that report, aside from getting to credit monitoring and the alerts when you pull your credit report each month, you’re getting the data from all three bureaus, and you’re getting all the different versions of the FICO score. You’re getting the mortgage lending score, you’re getting auto lending, credit card borrowing um, all the good stuff, so you can really see the credit report the same way the banks and lenders can see the credit report, okay?
  • 05:33                                   Um, another really good site, and I’ll give you guys a quick link, is going to be smartcredit.com/keycredit. So we’ve been working with SmartCredit, really good credit monitoring site, super awesome tech, [inaudible 00:05:53] app, [inaudible 00:05:55] your credit, and you’re getting real-time alerts. The big benefit with our SmartCredit credit monitoring, is [inaudible 00:06:02] run your credit multiple times throughout the month, and it’s just a little cheaper than myfico, it’s about $25 versus the $39. Okay? So another great resource, keep in mind, we’re not offering FICO scores through this website, okay? We’re offering an educational purposes only credit plus score, where with myfico, you’re getting exactly what the banks and lenders are seeing. Okay guys?
  • 06:22                                   If you have any additional questions regarding Credit Karma versus your FICO scores um, how you should be pulling your credit or preparing your credit scores um, months ahead uh, from getting any mortgage lending, by all means give us a call. There should be, if you’re on Facebook, there should be a learn more button right below my finger here, click on that button, it’ll take you right to our website, you can give us a call and ask any questions. Thanks, guys.

 

FICO Credit Score? A crucial aspect of knowing whether or not you’re in need of credit repair is obviously learning what your actual credit score is. After all, those crucial three digits are what lenders look at when deciding how at-risk of a consumer you are and whether or not your application should be approved or denied on everything from mortgage loans to auto loans to student loans. But how consumers attain this credit score information is a topic that has always been up for debate.
The aspect of how to attain credit scores recently made headlines again, as two of the leading credit reporting agencies in the United States were fined for allegedly charging consumers to check their credit scores – a practice viewed as unethical and misleading by the Consumer Financial Protection Bureau. In light of these recent events, the question remains: Should consumers pay for their FICO scores? Or should they rely on free avenues for attaining this crucial data?

FICO Credit Score. Where to Get Free?

Most experts advise consumers to check their credit scores and credit reports at least once a year. This is suggested even for consumers with very good credit, as checking such information annually can help detect potential errors and lead to quicker all-around fixes. Federal law permits consumers to attain credit reports free of charge from the three main credit reporting agencies once a year. Consumers that are looking to repair credit to make themselves more attractive on a loan or credit card application, however, may need to check their scores more frequently than annually to judge where they stand. The good news is that more and more outlets are making it easier to do this on a complimentary basis.

Here’s a look at some of these free avenues available for checking your FICO Credit Score:

  • Your bank or credit union: Many financial institutions will offer free credit score checks for members. Some may even offer complimentary consulting services to help consumers reach their credit score goals.
  • Your credit card company: Credit card companies like Discover now offer free credit scores to both cardholders and non-cardholders. Citi and Chase have similar policies. Others may provide your credit score if you simply ask.
  • Websites: If you go the route of getting your credit score through a website, it’s important to make sure that the site is a credible one (i.e. CreditKarma) and that you aren’t supplying your credit card information for the service. Credible credit reporting websites will help provide you regular credit score updates, as well as provide guidance on potential purchases based on your score.
  • Applications: Applying for a new credit card, car loan, or refinancing? As part of the approval process, the lender will be surely checking your credit score to make sure you qualify. Take advantage of this situation to learn what your credit score is.

We should note that you can buy your credit score. However, you should only ever consider doing so when you’ve either exhausted the options that we’ve listed above or if none of the aforementioned complimentary means of acquisition are viable for FICO Credit Score.