Money Matters
Money Matters
Mastering Your Credit Score: Strategies for Financial Success in 2025
Elevate your financial game in 2025 with actionable insights on credit health improvement. Join me, Kim Chapman, alongside Tricia Arroyo from Confluent Strategies, as we unlock the secrets to mastering your credit score. From understanding why January is the perfect month to reassess your financial goals to deciphering the mysteries behind credit score variations among different bureaus, this episode is packed with strategies that will set you on the path to financial empowerment.
Curious about how to build and maintain a robust credit foundation? Learn the essential habits such as timely bill payments and managing credit utilization effectively. Tricia and I shed light on the intricacies of credit reports, and delve into navigating credit disputes without the need for costly credit clinics. We also tackle common misconceptions about credit scores, such as the myth of needing a perfect score, and highlight the significance of alternative data like rent payments in evaluating creditworthiness.
And it doesn't stop there. We dive into how life events, including natural disasters, impact your credit report and provide tips on minimizing the effects of credit inquiries. Whether you're planning a big purchase or simply want to ensure financial stability, our conversation equips you with the knowledge and steps to take charge of your financial future. Tune in to chart a course towards achieving your credit-related goals and set a strong financial foundation for the year ahead.
Have an idea for a show or a question for Kim? Send us a text message
Welcome to Money Matters, the podcast that focuses on how to use the money you have, make the money you need and save the money you want – brought to you by Neighbors Federal Credit Union.
The information, opinions, and recommendations presented in this Podcast are for general information only and any reliance on the information provided in this Podcast is done at your own risk. This Podcast should not be considered professional advice.
Welcome to Money Matters, the podcast that focuses on how to use the money you have, make the money you need and save the money you want. Now here is your host, ms Kim.
Speaker 2:Chapman. Welcome to another edition of Money Matters. I am your host, kim Chapman. As we kick off a brand new year, it's a perfect opportunity to refocus on our financial goals. Let's pause for a minute. Have you made any? Have you done those silly New Year's resolutions? We want to do something better than that. We want to really help you financially thrive in 2025. And what better place to start than with your credit right, no matter where you are. They range from 300 to 850. So, whether you're on the lower end or the higher end, there's always, always going to be room for improvement. And so joining me today is sales executive Tricia Arroyo, with Confluent Strategies, and she is an expert, and she's going to help you figure out what steps you can take to get your credit in check so that you can reach financial stability and reach those financial goals that you have in mind. Because I know you did it. January just started. I know you wrote down some things that you want to do for your finances.
Speaker 1:Welcome, tricia, thank you, kim, glad to be here today.
Speaker 2:I am happy to have you here. I know our audience, our listeners are, you know, ears wide open because they want to know how can they make some changes in 2025. We have people that are saying, hey, this is the year I'm going to buy a house, I want a new car, I need my credit score to go up. And it may just be somebody that says, hey, I just wanted to be higher, I don't need to buy anything, but I just wanted to be where I wanted to be. So if I need to get something, so you're going to help us do that.
Speaker 1:So why do you think this year, why do you think January is always a good time to start? Well, we always say the beginning of the year is a good, perfect time to focus on your credit and your health and your financial goals, because it represents like a fresh start. Many people get inspired by the idea of a clean slate, setting resolutions and maybe creating positive changes. So the beginning of the year is just the perfect time to do that. You know everybody's kind of getting over the holiday season and starting off fresh, so January is the perfect time to get your goals in order.
Speaker 2:And the good thing about it is, even if that's not you, if you're like, hey, I don't do those New Year's resolutions because people don't stick to it, guess what? Listen to the the information, because, whether you decide that January is not the time, maybe it's gonna be February, maybe it's gonna be June, this is gonna be some information that you can use 365 days a year. So, tricia, can you provide a brief overview of how Equifax and other credit bureaus contribute to determining credit scores? Absolutely.
Speaker 1:So Equifax, along with the three other reporting credit bureaus, we actually collect financial information from the lenders, banks and creditors. We take this data, such as, you know, your loan information, your credit card balances, payment history, credit limits and any outstanding debt, and we compile this onto a credit report and it summarizes a consumer's credit history. You're going to also have positive information and negative information, so collection items and bankruptcies will all actually be on the credit report. So, basically the credit reporting agencies, we just house the information so the creditors actually report it and we collect it and summarize it and put it on a credit report.
Speaker 2:So let's talk about their report, because, of course, as a financial counselor, members come in or they'll call in saying I want to improve my score and I'll say well, what is your score? Then we'll go into a session, we'll pull a score and it doesn't match. So why might a person's credit score vary between different bureaus and scoring agencies?
Speaker 1:OK, well, very good question, because a lot of folks have that question. A person's credit score will be different based on the information that's reported to the bureaus. So not all creditors are responsible for reporting their debt to all three of the credit reporting agencies. Some folks only report to Equifax, some only report to Experian and some report to all three. So depending on how they report, you're going to have different information on the credit reports. Also, there's a couple of different scores. There's a FICO score and a Vantage score. So depending on which score your lender is pulling, you know, you're going to have a different credit score.
Speaker 2:So quick question Is there a rhyme or reason why some creditors will report to all three and some may only report to one or two?
Speaker 1:It depends on where that creditor is located. So in the South in Louisiana, the Southeast Equifax is a primary bureau. Up North it may be Experian or TransUnion. So it just really depends on the creditor and their relationship. But most of your large financial institutions they report to all three.
Speaker 2:All right. So let's start with the newbies, right? Somebody that may maybe they're a youngster 18, 19, 20, and they're looking to start credit. Or maybe there's somebody that's even older and they're like you know, I've kind of stayed away from credit, I don't know what it is, what. What tips do you have to help them get started?
Speaker 1:Well, first of all, building a solid credit foundation takes time, Can't be done overnight. Say that again. Please say that again. Building a solid credit foundation takes time. You cannot do it overnight. So you need to start off with credit accounts. You know you can go to your credit union such as neighbors, open up a credit card could be a small $500 balance, but you open up those credit cards and you start paying them and you pay them on time and so, as time goes on, you will actually build your credit.
Speaker 2:Tricia. What are key habits for those looking to improve or maintain a healthy credit score? What are those habits they should?
Speaker 1:adapt. It's essential to adapt good financial habits. First of all, I always tell people make sure you pay your bills on time. Maybe set up auto pay so you don't miss any payments. Don't max out your credit cards, because that's weighted heavily on your credit score. Now.
Speaker 2:I'm going to stop you just for a second. You said don't max out credit cards, and that's very, very important, but maybe I want to. I'm going to stop you just for a second. You said don't max out credit cards, and that's very, very important, but maybe I want to, I guess, get to the nitty gritty of that, because I know, when I was 18, I knew that term don't max out the credit card. So maybe I went just a little bit below the limit, but they should actually be doing a little bit better than that. Where should that ratio be?
Speaker 1:We always say about 30 percent. So utilization plays an important role in the calculations of the score. So if you keep your utilization below 30 percent of your credit total credit limit, that's going to give you a pretty good score.
Speaker 2:I think that's so important because it's such a common term to say maxed out, maxed out, don't get maxed out. And so individuals like myself when I was young, I was like, well, was it maxed out? But my credit score wasn't good because I didn't know anything about that. 30% credit utilization and just to kind of explain that a little bit more, that means you look at what your limit is, that's been assigned to you, and then try not to keep a balance over 30% of that, no matter what it is. If it's $1,000, 30% of that is $300. That's going to be your target amount, whereas when I think of maxed out and not being maxed out, that could be $700 to somebody, but really that magic number in this case is 30% 300.
Speaker 1:That's correct.
Speaker 2:I just really wanted to reiterate that because we use that maxed out term and people are walking around saying, hey, I'm not maxed out, but then they're not understanding why their credit score isn't as high as they would like it to be.
Speaker 1:That's correct. Also, avoid applying for too much credit at one time, because that can make you look risky to creditors. And then I would always say avoid closing out old and unused credit cards, because when you close that out, you're closing out a lot of your credit history.
Speaker 2:Can you speak a little bit more to? When you say too many credit cards are opening too many accounts, and the reason that I say that is so many young listeners that want to start credit. They're under the myth that, oh, I need to build credit, I got to have credit, so they'll go out and they'll open three, four, five, six, 10 accounts, and then they'll come and say, well, I thought that's what I was supposed to do, so can you maybe give us a little perspective as to how could we determine what's too many accounts? Well, that's a tricky question.
Speaker 1:So nobody really knows. All of that information is proprietary to FICO and Vantage the number of ideal accounts that actually goes into developing the score. What I always tell young people or consumers just don't go crazy. Take out the credit cards that you need, you know. So I mean, if you need a Visa card or a gas card or a department store card, just get the number of credit cards that you need, you know. Don't go out and open up all these credit cards during the holidays because they're giving you free interest and, you know, free umbrellas.
Speaker 2:That's how they got me Exactly.
Speaker 2:All right. So and like I said, I interrupted you because I did some of those points. It's like I know that our listeners need to hear some of these things a little bit louder, a little bit more, over and over again, because you know these are the types of mistakes that I see. After the fact, they go over 30 percent, they go and open four or five and 10 accounts, like you said, that they don't even need, but they figure that that's something that's going to help them out. So go ahead. Are there some other you know key tips that you want to provide for somebody just starting out.
Speaker 1:That's. That's pretty much it, just you know. Like I said, don't max out your credit cards. Pay your bills on time. Avoid too much credit.
Speaker 2:Avoid too much credit. Got to have a little to have a credit score, but you don't have to have a lot. So typically, how long does it take for positive financial actions to reflect on one's credit report?
Speaker 1:That could take anywhere between 30 and 45 days, depending on how and when the creditor reports their data to us. So if you go out and open up a credit card January 1st, they're probably not going to report that information to us until February. So it just all depends on the amount of time it takes for the creditor to report that information to us. So I'd say anywhere between 30 to 45 days.
Speaker 2:You know, every day I imagine how they have statistics every four minutes somebody's doing something. You know there are individuals, consumers, that have faced a major financial setback. What action should they take to rebuild their credit?
Speaker 1:Yes. So recovering from major financial setback requires time, effort and a strategic approach. Create a budget. I would always say evaluate your income and expenses and prioritize essential payments. Review your credit report. Always ensure that the information in your credit report is accurate. Understand if you have negative marks. Understand what that means. I'd say pay off your debt strategically. Pay off the higher interest rate credit cards first, because those are the ones that are going to kill you. You can always seek financial help if you need. You know.
Speaker 2:However, I would avoid credit clinics, and why would you avoid those credit clinics?
Speaker 1:I would avoid credit clinics, because everything that they're going to charge you to do, you can actually do that for free.
Speaker 2:I feel like we just need to have an echo, because everything you're saying is so spot on and it's just those things that people really, really need to know. As a matter of fact, when you said the word budget, I was just thinking and I was looking over at Chad, who's recording this that I need that buzzer that goes, and every time that we have a guest that says you need to create a budget, chad, I need you to hit a button that goes bum, bum, bum, bum, because it is so key, it is such a foundation to financial stability. So we'll move along, we'll move along. How often should somebody monitor their credit report?
Speaker 1:Well, you are actually entitled to a free copy of your credit report once a year from all three of the credit reporting agencies. So what I always tell folks is, since you get one from each of the bureaus free one time a year, I would space them out. So, every four months, get a copy of your credit report, look at it, make sure it's correct, and so you're actually monitoring it throughout the year. And there's lots of other sites that you can actually monitor your credit report for free.
Speaker 2:Now, you and I, we've seen quite a few credit reports in our days, so we know exactly what we're looking at. We know exactly what we're looking for. How user-friendly, would you say, credit reports are these days for consumers to look at?
Speaker 1:They're very user-friendly, so they have all of the information on there that the consumers need. You know where they can dispute the information, but the reports that consumers get are very consumer friendly. So and if they want to get a copy of their free credit report, they need to go to its annual credit report dot com. That's where they will get a free copy of their credit report. Now you will not get a free copy of your credit score, but you will get a copy of your free credit report.
Speaker 2:And I always tell consumers that everything is not wrapped up in just a score, that you should take the time to actually look at and read a credit report. What are some of the key items? You know I'm saying OK, I don't, I don't have a score. Or even if I have a score, what are the key things that are driving that score? What should they be looking for and analyzing on their own personal report?
Speaker 1:Well, first of all, they need to make sure that you know Everything is correct on the credit report, including starting with your name. That's right. Make sure your name is correct, your addresses, make sure all the creditor information is correct and just make sure it's actually your information on the credit report. Make sure your social is correct, your date of birth, your age. Make sure everything is correct on that credit report because it will come into play whenever you go try to take out credit. If you go to a creditor's office and apply for credit and your information is incorrect. So that's going to start a whirlwind and you really want to make sure it's correct before you go and try to take out an auto loan or a mortgage or, you know, even, a credit card.
Speaker 2:And if I look at a credit report and I do see that something is wrong. So let's talk a little bit about maybe. First of all, I want to talk about the things that maybe that won't matter. So, for example, if they have a wrong address, should that just be a red flag or do I need to contact them and have that corrected or updated If there's an incorrect address on your credit report, you need to go ahead and dispute that and have Equifax take it off.
Speaker 1:Strictly because if you've never lived there, then you want it taken off Now. If it was a previous address, leave it on there, because that's going to show you know where you've lived previously. So you want to leave that on there.
Speaker 2:If there is a legitimate mistake, let's say that there's. Is it fraud or could there just be a mistake? Because, guess what? There are mistakes on the credit reports, right?
Speaker 1:There can be mistakes, that is correct.
Speaker 2:Is there any particular thing that makes you more vulnerable to a credit mistake than others? And the reason I ask that question is I always use the example people that have the same name, especially gentlemen, and you know if your dad has the same name and then you have the same address, those are two things that you share in common. My husband and son have the same name, same address and, lo and behold, the same birthday, so they share a lot of things in common. I've worked with twins in, you know, over my years in the credit union, where, of course, you know they had names. You know how we like to do twins Stacey and Tracy or Ron and Don and then they have the same birth date and back in the day their Social Security numbers would be just one digit off. And so are there other factors that may make you more vulnerable to having a mistake on your credit report?
Speaker 1:Well, junior and seniors that always come into play. And you know, when I worked with my creditors, I always tell them look, when you're pulling an application, make sure you put in the consumer's legal name. You know, a lot of times here in the South you know we may go by nicknames and so I go in and I want to apply for a loan and I use my nickname. Well, that's going to cause problems because that's not your legal name. So really they should be applying for credit with your legal name. You know, even though if you don't like it, you still need to apply for credit with your legal name, your date of birth, your social address and so forth. But junior and senior issues come up all the time because a lot of times creditors will leave that off or the applicant will leave that off of their application. And if it is, if that person is a junior and they live at home with their mother and father same address, same zip code so we can it can cause problems.
Speaker 2:All right. Do I need a PhD to fill out a credit dispute?
Speaker 1:No, no, they're, they're, they're really easy.
Speaker 2:And on average and I know it's going to be a case by case, but on average, how long does it take for somebody to get feedback, for a consumer to get feedback on a dispute?
Speaker 1:So when a consumer files a dispute with the credit bureaus, we send the dispute to the to the financial institution. They have 30 days to respond to that dispute. If they do not respond to that dispute in 30 days, then that information is removed from the consumer's credit report.
Speaker 2:So I want to talk a little bit about the different scoring models. Can you explain how recent updates with the credit scoring models could impact individuals' credit profile? Yes, so there's been. With the credit scoring models could impact individuals' credit profile.
Speaker 1:Yes. So there's been some recent credit scoring models that have introduced changes to make a more accurate and comprehensive picture of a person's credit. So we've just recently introduced trended data, which analyzes credit usage and payment patterns over the past 24 months rather than just providing a snapshot in time. So what is an example of that is, a person who consistently pays down their balances or reduces their debt over time may see a credit score boost, while someone who carries high balances all the time and only makes minimum payments, they could potentially see a score drop if they pay on time. Some of the positive changes are responsible, long-term credit habits are rewarded and thin file consumers folks who have limited credit history they benefit from broader scoring. And some of the negative changes the high credit utilization and inconsistent payments those typically will be penalized more heavily.
Speaker 2:So you talked a little bit about paying. You know paying your debt down. How does paying down debt or reducing credit card balances impact your credit scores, because sometimes I've seen where it has a positive and sometimes a negative. My daughter texts me just the other day because she paid off her credit card and her score went down. She's like Mom, what's going on?
Speaker 1:And it also depends what else is going on. She may have paid that credit card down but then something else hit. So your score is dynamic, it's always changing. So you're just because you have a 750 today doesn't mean you'll have a 750 tomorrow. So with credit scores, they're always changing. So it just depends on what's going on at that point in time. So with credit scores, they're always changing, so it just depends on what's going on at that point in time. So you know there are different factors that go into the credit score payment history, credit utilization, length of credit history, credit mix and new credit. So those are the different five items that go into a credit score.
Speaker 2:So can you explain a little bit what credit mix means?
Speaker 1:Credit mix means that, making sure you kind of have a healthy mix of credit, making sure that you don't have 15 revolving accounts out there. So you know, making sure that you have a couple credit cards. You probably have an auto loan, maybe a mortgage, so you know you're less risky if you have a house, a mortgage, an auto loan and so forth. But really the two key factors that go into the credit score, that make up that credit score about 65 percent, is payment history, how you pay your bills, making sure you're not delinquent, and credit utilization.
Speaker 2:The big two that I tell people all the time 35 percent is that payment history, 30 percent is that credit utilization. That's over half of your credit score, right there. Sixty five percent. So those are the two things that you got to get right. You got to pay your bills on time, right? Absolutely, you've got to keep that debt low, that's correct. So, tricia, if I've had a hard time and I wasn't paying my bills on time, now I'm straight and I'm paying them on time, but I've got all these ugly remarks on there, that's not really a dispute, but I don't like it and it's probably going to keep me from being able to get credit or buy that house. So can I just call a credit bureau and say, look, you know it's.
Speaker 1:I want to dispute this because it's going to keep me from getting other credit. Well, unfortunately you can't dispute anything that's on your credit bureau. You're entitled to dispute it. However, your creditor is probably not going to look so kindly to that. If you were delinquent on your bills, then it's their responsibility to report that to the credit bureaus.
Speaker 1:However, you may call your creditors and you may kind of work out a deal with them, but you can't call Equifax and we can't remove anything. So I mean, if you call us, we have to reach out to the creditor and get the response from the credit grantor. Call us, we have to reach out to the creditor and get the response from the credit grantor. So if you dispute it and we send it to the credit grantor and they come back and say they were never 30 days delinquent, then we remove that obviously. But however, if the credit grantor comes back and says yes, they were 30 days delinquent, then we have to leave it on there. So you have to look at the credit bureaus, as we just house the information so you can contact us and dispute anything, but we have to go to that creditor.
Speaker 2:Now I'm going to age myself, because way back when, right here in Baton Rouge, we actually used to have a credit bureau office and you know, and a consumer could go in and talk to a person and, you know, get information, learn about their credit. And I heard you just in general say you know you would call Equifax, but is there an actual customer service line? Can a consumer get somebody, whether it's Equifax, experian, TransUnion? Can you actually get a human on the phone or is it going to be you're forced to do something you know, like a chat online or an email?
Speaker 1:You can actually get a person on the phone so you can contact Equifax by phone, by mail, or do an online dispute. So either of those, any of those three ways. And, yes, I used to work at the Credit Bureau of Baton Rouge.
Speaker 2:So you're aging yourself too? Yes, I'm aging myself too.
Speaker 1:I worked at the Credit Bureau of Baton Rouge and we did have a consumer department and we would have lots of people come in and dispute items on their credit report. But, like I said, we had to send that off to the credit grantors. There was nothing that we could do. We were just different.
Speaker 2:We were just still convenient and I tell you we'd love it if we could have that service back again. So we talked a little bit about disputes and I know you mentioned that if the creditor doesn't respond in 30 days, typically it comes off. What if the creditor is, you know, hey, this is legit, this is staying on, or I'm not able to get a resolution? What can a consumer do then if they're not getting a satisfactory resolution? Right?
Speaker 1:Well, they can actually contact the creditor themselves and try to talk it through the creditor, talk it through with the creditor to see if they can come up with a reasonable resolution.
Speaker 2:Now the 100-word statement. Whenever I am teaching a class on credit and I say that, I get wide eyes like nobody in the room has ever heard of the 100-word statement. Can you tell us a little bit about what the 100-word statement is, and when should a consumer use that?
Speaker 1:Well, consumers are entitled to put a consumer statement on their credit report if they would like. A lot of times folks will put that on there if they're maybe going through a divorce and they just want the credit grantor to know a little bit more about their situation rather than just looking at the trade lines, so it can show maybe a bigger picture of what's going on in their life at that time. So you can put a hundred word statement on the credit report.
Speaker 2:Another statement or term that I see on the credit report often is affected by a natural disaster. How do lenders view an individual's credit report? What impact does that statement have?
Speaker 1:Well, that statement, you'll see that a lot you know, living in Louisiana with hurricanes that have hit. You know Katrina for a matter. As a matter of fact, you know people were out of work, people lost their jobs, so they would put that on there. And a lot of times it's the creditors that put affected by natural disaster. Because you may have a consumer who's never been delinquent before in their entire life and then all of a sudden a hurricane comes in and impacts them and they're out of work, they can't pay their bills, and all of a sudden they're 30 days, then 60 days and then they're 90 days delinquent on an account and they've never been delinquent before in their entire life. So that kind of shows a complete picture of what's going on.
Speaker 2:All right, so, Tricia, so you know. We've been talking a lot about how to improve your score, how many accounts you should and shouldn't have, but what I want to talk about, what are the types of accounts that are typically on the report and the types that are not on the report? For example, I've heard a trend now that you can add your rent to your credit report.
Speaker 1:That is a trend and that's called alternative data. So there we do have alternative data sets that creditors can get, such as rent income, employment. So that's a trend. That that's that's coming around the pipe right now. But a lot of times on a traditional credit report you're going to have your credit accounts, your credit cards, your mortgage, your auto loans. Now your debit card information is not on there, but just basically your credit information. But, however, the alternative data, we can actually get that information and it's not going to be on the credit report, it's just on a separate report that a creditor can actually access.
Speaker 2:And can that help boost my score.
Speaker 1:Can that help me look a little bit better it can, and that's all solely dependent on the creditor and their underwriting guidelines. So you know, they may look at it. Well, hey, they've been paying their rent and they've been, you know, in this apartment for three years and they have good rent history and they pay their bills on time, and so that may give them a little bit of boost.
Speaker 2:All right If I have an 813 score. Should I? Is there something I should do? Is it worth it if I want to have an 850? I'm a perfectionist, right, and I'm coming to you or I'm going to a counselor and it's like I want to get an 850 just because I want to live that perfect life. Is there any reason that a person should strive to get to an 850? And if so, are there any particular strategies that exist for those top tier individuals? No, for those top tier individuals.
Speaker 1:No, and I laugh because people complain. People will call and you know, my credit score is, you know, 815 and I can't believe it's so low. And I'm like, oh my goodness, it is not low, that you have a great credit score, Do not worry about it. So the factors that go into these credit scores, they're all proprietary. So there's different algorithms that go into these credit scores. They're all proprietary. So there's different algorithms that go into these credit scores and nobody really knows what they are, and so I don't know how to get you to have a perfect credit score.
Speaker 2:Then why are you here, Trisha?
Speaker 1:You know, if you pay your bills and you don't overextend yourself, you're going to be fine.
Speaker 2:So let's talk about another sore spot, I think, when we're talking about credit Inquiries oh my goodness, you know there's so many myths about credit out in the world and I think inquiries is definitely at the top of the list, because you have people that just they fear an inquiry like the plague. Talk a little bit, you know about what an inquiry is and you know when should a person be cautious about having too many inquiries? And then even the difference between a soft inquiry and a hard inquiry, right.
Speaker 1:Well, inquiries do not hurt your credit score, like a lot of people think they do so. In the past they may have impacted the credit score, but now they are much more consumer friendly. So when you're out there applying for credit, if you go to neighbors and you open up a credit account, a credit card, it's going to post a hard inquiry.
Speaker 2:And is that going to take my score?
Speaker 1:100 points. No, it is not going to take credit score 100 points. Inquiries only impact the credit score about 10 percent. So the way inquiries work on the credit report, inquiries stay on there for two years but in the calculations of the score it's going to only go back for one year. So we only look at one year of inquiries. And the way it actually is looked at is that we group those into groups. So if you're out shopping rates for a credit card or a mortgage, you're not going to be penalized for shopping rates. So we take those inquiries and we group those into one for 45 days so that allows you time to go out and shop for credit and not be penalized Because you know if you go to an auto dealership they're going to pull your credit From.
Speaker 2:A to Z.
Speaker 1:Yeah, they're going to send it out to five or six different lenders, well, those lenders are going to pull your credit report as well, but in the calculations the score is going to only look at it as one inquiry. The score is going to only look at it as one inquiry, so as far as it impacting your credit score.
Speaker 2:That's not going to be why you're going to have a bad credit score, exactly so. You know, sometimes we have members that come in and say you know, I had my credit pulled and it dropped, you know, 100 points. And it's like let's look at your report because more than likely, there's something else going on, absolutely, absolutely. And of course, you know it's sad that, no matter what the topic is, it seems like I always have to bring up those things, those red flags, those scams. Are there any red flags or scams, things consumers should be aware of, especially when you're vulnerable and you want to improve your credit?
Speaker 2:You know there's going to be so much out there that says, hey, come over here, we can do this. There is going to be so much out there that says, hey, come over here, we can do this, we can do that. And then, a lot of times, this stuff is just scams. Are there anything, any particular piece of information, you want consumers to know, to be aware of, in terms of, hey, I know you want to improve your score, but stay away from this. Or if you see this, this is going to be a red flag.
Speaker 1:Well, there's no quick fix to fix your credit. It takes time. So if you've had some bumps in the road and you have some negative things that have impacted your credit score, it's just going to take time. So, as long as you catch up on your obligations and you're paying your bills on time, over time, your credit score is going to improve. Avoid the credit clinics. Everything that they do they're going to charge you for and you could actually do it yourself. So those are a big scam, I mean. And they'll charge you five, six hundred dollars to dispute information that you can actually do for free.
Speaker 2:All right. So, tricia, there's somebody out there listening saying my credit score sucks. It always goes back to college, right? Oh, when I was in college and I didn't know any better and we didn't have financial literacy classes, and so my score sucks. But I'm ready to make a change. Right, I need to get out of the 300s. I need to get out of the 400s. I want to at least get to five or maybe one day eventually get to a seven. So if I'm that person and I have those skeletons of yesteryear in my on my credit report, where do I start? What do I do?
Speaker 1:Well, first of all, I'd get a copy of your credit report and I would actually see where the problems are. And so if you had opened up credit accounts when you were in college and maybe they're charged off, you may want to reach out to those creditors and see if you can come up with an alternative to to make amends, you know, you know offer a settlement and then start with some of the credit builder credit cards and just go from there.
Speaker 2:All right. So, of course, the whole goal of this show and having you sit down with me is to help our consumers, you know, reset, refresh their credit and, you know, start making things a little bit better in 2025. So what are your final tips for that individual that says, hey, that's me, I want to be able to improve my credit score? What are those key steps, key things they need to be working on or focusing on?
Speaker 1:First of all, I would say monitor your credit report regularly. Make sure you know what's on the credit report you know. Check for any inaccuracies. Make sure it's up to date with your most current information. Don't just go in blind to a creditor's office and try to buy a car or a mortgage you know. Make sure you know what's on that credit report. Also, I would say pay down your high interest credit cards. That's imperative. So pay those down first and then also set up and maintain online payments on time payments.
Speaker 2:Yes, definitely.
Speaker 1:You just want to make sure that you're paying those bills on time and if you forget, like I do sometimes, you know, go online and set up the automated payments.
Speaker 2:Well, this is good information. So what we're going to have you do is come back in about six months so that when we're all reviewing what those New Year's resolutions were and you know, I'm going to do this, I'm going to do that and hopefully many of those individuals out there listening are actually going to do those things. But they may get to a point where it's like, ok, what now I've moved the needle a little bit. What's my next step? So can I get you to commit to coming back in about six months and we'll kind of do a refresher, see what new trends may be going on with credit, or just kind of address those? I've done those things. I've opened up a new credit card account, I've been paying my bills on time. What do we do next? Sure, that sounds good.
Speaker 2:All right, ladies, and gentlemen, you heard it because you know got to make sure I can get her back in here. Patricia, thank you so much for coming by and sharing this information. Like I said, I think it's a great way to refresh and start the new year off looking at that credit, because it impacts so much of what we do on a daily basis. Right Well, thank you, I appreciate you having me.
