Vol. 17 - Asking Financial Advisors Their Credit Score
In this episode, we are discussing asking financial advisor sto share their credit score to determine working with them or not. We cover:
Credit scores may tell a story
What it means if they don't share
What credit scores imply
Socially responsible Investing
Check out the past episode Tips for Choosing the Right Financial Advisor
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TRANSCRIPT:
Naseema McElroy (00:01): All right. Nurses on fire. We are back with Leisa Peterson. Our lovely Leisa Peterson, our certified financial planner. And today we are going to talk about, again, things that you would ask a certified financial planner or a financial planner that you are interested in working with. And this question came up in the community and it said that I would ask their credit score to the ensure that they are knowledgeable because the credit score is the report card in the adult world. Okay. So, Leisa , what would you do if somebody asks you what your credit score was?
Leisa Peterson (00:37): I love this question. First of all, I was shocked when I got what was being said, just to say that, okay. Cause I'm like, Ooh, I can imagine some people wouldn't answer that question or they'd be really uncomfortable as an advisor. However, the second part was I would totally share it because I'm super proud of my credit score and people, my sense is this is only the people who have something to hide would be afraid of sharing it. You can't use it against somebody, right? I mean, it's not a big deal, but it is a very personal thing. Would you agree with that?
Naseema McElroy (01:13): It is very personal. I might've been reluctant to share my credit before cause to me, yeah. Oh, it was a place of shame. Even when I did reach the paying off all this debt credit to me was a big struggle because within my story, you know, I've had bankruptcies and in that bankruptcy, you know, my credit card has got wiped out. And so I didn't even qualify for credit cards for a long time. So when I was paying off all my debt credit, even never even came into play because I didn't have credit cards. I've been denied for so many credit cards, for whatever reason, like credit cards. To me, our credit scores always represented kind of like a badge of shame and it always held and it still holds like my bankruptcy. Isn't gonna fall off my report a couple of months. So 14 years I've had this thing on my credit that people continuously ask me about that.
Naseema McElroy (02:08): Even though it doesn't affect my credit, it still affects my credit life. My credit score will not go as high as most people's as fast, just because I have that factor on there. But, and also for me, I'm at the point where it could represent shame, but it doesn't represent shame because it AIDS in a story. It AIDS in my story and it tells you about what I went through, but how I'm overcoming that. And that there is hope there is some light at the end of the tunnel. And you know, I'm kissing that 800 range, but I'm not there yet, but because I have that testimony to go along with it, you know?
Leisa Peterson (02:50): Yep. So what I'm getting from, what you just shared is that, you know, if you ask the question and you let them know that it's not about judging them, but it is about understanding, standing where they've been, you know, maybe they've got great credit, but if they don't, you want to hear the story behind it because it will help, you know, the way that they're approaching their own finances. And we don't want platitudes platitudes, or just like saying things because they sound good. And I think this is the problem in the financial services business in general is they'll just say all these fancy things. And sometimes they'll just amaze you with their like things they can tell you about. But in reality, they don't really factor into your relationship. Whereas if somebody were to say, Hey, I'm going to be honest with you. And first of all, the minute they say that, and then they start to tell you a story, like maybe their credit score.
Leisa Peterson (03:47): Isn't great, but they do have a story of compelling. Like this is how I got myself into a problem, or this is what happened. And then this is what I've been doing ever since. Like, gosh, I just think that is a really fascinating question because you would learn. And if somebody says, I'm sorry, that's none of your business. It's like, well, you're going to know my whole life by the time we move forward. So for me to ask that simple question, like where's the defensive kindness coming from? You know, like, why wouldn't you want me to know? So you can turn it around and use it as a way to see if this person is like seriously interested in you and you as a person, or are they just interested in like checking the notch? You know, I got another client.
Naseema McElroy (04:37): Exactly, exactly. And I think that's smart. And I also think that when these questions come up, it can also serve as a teachable moment because I don't necessarily think that having a great credit score is associated with being super good with money or being wealthy, having a great credit score to me, signifies that you may know how to manage debt, but what if you don't believe in debt? What if you just believe in paying everything cash, does that make you less responsible then somebody that has a really stellar credit score?
Leisa Peterson (05:12): Well, yeah, because what you're implying is that the score might be lower. Cause they're not using credit that much. Right. And an extenuating circumstances, you have to be prepared for whatever they say. Cause it may be like, Hey, you know, there was a really tough family emergency and they're just going to be things that are way too personal for them to share. And I think you really have to be compassionate, but it's in the response, it's in the, Hey, I get why you're asking that or how dare you ask that? It's like, well, that's kind of important. I mean, and I think you're right. It's not that you are necessarily bad that the advisor is bad with money. But the problem is, is that the system has not been created with very many benchmarks or tools to actually get to the bottom of whether or not somebody is really there just to make money or if it's like a lifelong passion of being in service of people and their money, because don't, we want to work with advisors who it's a lifelong passion to like be in service of people and their money,
Naseema McElroy (06:17): but people don't know how to ask those questions to get to those people. I didn't know that when people reached out to me in search of financial advisors, they're just looking for somebody who like we talked about before is kind of just going to take over everything and fix all their money problems. And I think that's what it's going to be, but they're not understanding that it's a relationship, it's a balance because ultimately you're the only person who can, it makes your money problems. But these are people who can give you the tools and hold your hand along the way. But it has to be somebody that you really want to work with. So I think, um, going back to the episode where we talked about what questions to ask, when you're looking for a certified financial planner or, you know, looking for someone to help you with your money. I think that's a good episode to revisit because you really want somebody that has your best interests in heart. Someone that understands what you're going through. Like we talked about in the last episode and someone, because you are going to be revealing your, all your personal information to somebody that I feel like you can trust with that information.
Leisa Peterson (07:30): Yeah. I think it was a great conversation last time. And I think that knowing that people are asking you insightful questions, it's so funny because yesterday I met with an advisor that I'm actually thinking, even though I am talented and could do this myself and I have been for the past 10 years, I am looking to move all of my money to an advisor who specializes in more alternative investing. So socially responsible investing. And you know, I've been following him for years. He's been on my podcast. I he's written books about the process that they take people through. And it's a very high consciousness decision. I didn't even care about his fees quite frankly, because I know we're so aligned in the core values that he'll take care of that like he will pay for himself, but it's about aligning our values together. And even when he went into the conversation, what I'm excited about is the questions that he's inviting me to dive into.
Leisa Peterson (08:32): Like he gave a full spectrum, all the different things like investing in, you know, folks that would not be able to get financing for their business, for example, that they have funds that are specifically set up for like, I mean, just so many creative things. And I was like, I'm sold because this isn't about the money for me. Like, I feel like I'm going to be okay. This is about making sure that that money is, you know, being used in a way to make the world a better place. And so again, you can ask these questions of your advisor too, because they do have some access to socially responsible investments. And by the way, those products will get just as good of returns as the other ones, but people don't ask. And so then they don't recommend them because they don't understand them. But if you want to find someone who is more interested in socially responsible, then, then go out there and look for them. There are directories, you know, both of us could have people in fin con probably from that community that I have met, who are specialists as well. But you know, that would be another thing like ask them questions about things that are important to you, or that you might not want money going into certain companies, you know, guns or tobacco or certain things like you can't screen for those with most advisors nowadays.
Naseema McElroy (09:51): And I think like a lot of things that have been coming up lately as people that have supported a whole lot of racist organizations and people are trying to define those because honestly the only way to create change is to hit people in their pockets. And if that's something that's super important to you, then it's important that you work with a financial advisor that understands that, or else they'll pigeonhole you into whatever kind of investment makes the return that they think that you should be getting. And so these are all good questions. I'm so proud of my community for asking these questions, making sure to ask your question in the community or on the NRCS on fire podcast.com/ask. If you have any more questions again, Leisa , it has been my honor to have you here on the podcast because you always bring so much knowledge, but always from,
Leisa Peterson (10:44): uh,
Naseema McElroy (10:44): just such a compassionate heart and just a good place and always learning something new. So I appreciate you. Thank you. Thanks everybody.
Hey there I’m Naseema
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