Rebuilding or Starting Your Credit From Scratch - Expert Edition Episode 17

Our credit expert Shante Nicole walks you through the steps to establish a strong credit history weather you’ve had a financial set back that took your credit off track or you’re just getting started. She is also hosting a credit challenge and it started yesterday (3/27/23) but she has some spots available just for my podcast listeners and followers, but only if you sign up TODAY!

Make sure you follow her and join her Financial Common Cents Facebook group 

About our expert:
Shante Nicole’s passion for serving others has always been at the center of her life.  She is an author, financial educator, certified credit consultant, holds a degree in nursing, and is the founder of her nonprofit organizations: F.A.C.E. (Facing Autism with Children Everywhere), and her latest endeavor, Financial Common Cents.  As if that doesn’t keep her busy enough, she is also a wife and mother of a child with autism.

In January 2017, she started an online Facebook community, "Financial Common Cents", whose motto is “Education…Restoration…Liberation”.  It was her mission to empower people to rebuild, restore, and repair their credit.  She also helps individuals devise a consistent plan to manage their finances and their debt.  To date, her “FCC family” has grown to over 102,000 members from over 100 countries. 

Through her nonprofit organization, Financial Common Cents, she facilitates workshops, online courses, and personalized financial & credit coaching. As a panelist with SunTrust Bank’s onUp Movement, she educates her community on credit, budgeting, and debt management.

She’s also the founder of “Kids Making Cents”, a financial literacy program that offers educational products and workshops in the community including schools, churches, and recreational camps.

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TRANSCRIPT:

[00:00:00] Naseema: All right. My financially intentional people. I'm back with our credit expert, Hanta Nicole, and we are going to discuss like how to get started on your credit journey or how to reboot your credit if you are in a situation where you have to rebuild.

So first of all, hey Shante. Thank

[00:00:20] Shante: you. Hey, thanks for having me back.

[00:00:23] Naseema: Of course, of course. And I just love having you on cuz you have all the credit game. But this is like a really important topic because actually I posted about my bankruptcy and my stories a couple days ago, and people were really interested in how I rebuilt from a bankruptcy and, I didn't have any expertise back then.

That was in like 20, right? 10 when I filed bankruptcy. And so I just did what they told me to do in the bankruptcy paperwork cuz you basically have to take a class

[00:00:55] Shante: and stuff. Things

[00:00:55] Naseema: have to prove stuff. . Yes, yes, yes, yes. So I did not do much. In an informed manner, but it'll be nice to have some gems on how to rebuild credit your expertise, what you have seen.

So, oh, but before we start on that, I wanna mention that Shante is doing a 30 day challenge. And it started yesterday, but if you sign up today, which is March 28th, , you can get in on the challenge, but this is the very last day. She's gonna let people. I

[00:01:31] Shante: love you audience. Thank

[00:01:34] Naseema: you. Thank you. I will put the link in the show notes to join this free challenge.

But anyway, diving right in, let's talk about steps people need to take to either start their credit journey or to rebuild. So

[00:01:49] Shante: I'm gonna touch on the rebuild first cuz most. . Adults have credit, they just have made some very poor decisions. And that's gonna tie into starting from scratch. There may be a little bit of differences, but not many because rebuilding is also almost like starting from scratch.

like you're rebuilding. Okay. So the first thing is, and I love analogies and people always say, you use the best analogy, so pat myself on the back and hopefully like it, it can be complicated topic to talk about. So I try to put it in like real. People's terms. So the first thing is I see people all the time in my group, or people ask me, like they tell me the goals and say, what do I do?

I'm like, I don't know. You know, if you go buy a house, you don't ask the repair, man, what do I need to fix before he inspects the house? So you need to figure out what your starting point is like and what does that mean? Inspect your credit. understand how to read it. Most people don't even know how to read the report.

They're like, I don't know what this means. And this means it has terms, it has dates, it has status messages, it has remarks, everything you need to know this information. And it's not rocket science. It's just scary to face. And, and if people feel any ounce of confusion, they just sweep it under the rug because confusion and despair and frustration and stress like kick rocks, like, I don't wanna deal with any of this.

But then where does that leave you? In the same position year after year after year. And I hear people say, well, my credit's just gonna be bad, so, You know, whatever. Like, no, no, no, no, no. There's a cure . People just don't know. And then there some people out here taking the wrong medicine. So , so let me start talking about that.

But anyway, so yeah, we need to make sure that we have the right treatments. We need to know why, how sick we are, and you know, what sickness is it? So is it that? High credit card uses? Is it that you have lots of collections on the collections, medical bills or not? You know do you have any credit cards?

You know do you have a card note? What's your interest like? There's so many factors, right? So let's just talk about the inspection. I call myself the credit g p s guide. Okay? If you tell me where you trying to go, I'm gonna tell you exactly which direction to take, but I have to know where you're. All right.

You're not gonna get in a car, tell your G P s I'm trying to get to New York City to, you know, I don't know, the Empire State Building. And then it's like, well, I don't know where you're at, so I don't know how to tell you to get there. And you're in California, I'm in DC and we're both trying to get to the same destination.

G ps not gonna tell us to go the same way. Our starting points are different. And so inspect your. It's like inspecting a car or inspecting a house. Figure out what's wrong. You don't know what's to fix if you don't know what's the matter. So that's the first step. And then the credit scores, A lot of people tend to forget about the reports and they just worry about that three digit number.

I know we love it, but it comes from something, right? And so the next set of people , they say, I'm trying to get to 700. How do I get there? Once again, let's inspect first, but do you know where that three digit number comes from? That's the first question I ask people. Some collections and how long you had credit debt to income ratio, and they start naming all these things they've heard somewhere and I say, okay, well let's talk about it.

Here's another analogy. Do you have school-aged children? Do you have school-aged children? Ms. Ma'am. Okay. I do. I definitely, what do they bring home to you to let you know how well they're doing in. Their report card, there's also a three digit number typically associated with a report card or a transcript in college.

What is that three digit number? Their gpa and the GPA is coming from the grades. On the report card or the transcript. So let's circle back. Yes. Your credit score is coming from the information on your credit report. If it, if it's not there, it cannot be calculated. That is why people pay thousands of dollars to credit repair companies.

I'm using air quotes because they say, we'll get this off and get this off and get this off. And you think if nothing negative is there, I'll have great credit. And I'm here to tell you, I have a client that has not one negative item on her credit report, and she has, her scores are in the five. . Mm-hmm. now.

Yep. Her experts, the one you hear talking now has had three unpaid collections and 15 late marks, and I had a 7 42 credit score. So how is it possible to have all of those negative items and have a good score and then someone have nothing negative and have a bad score? Again, that goes back into understanding how the scores are calculated in the first place.

That's just the start. Okay. I know that was a mouthful, but we have to understand like all of these things because people just spit this jargon out, you know, dispute, refinance, credit scores, blah, blah, blah, and they don't really know what any of that means. They just hear it because it's credit talk. We have to understand what we're saying.

Right. So first step is figuring out where you need to start. So let's just say you don't have any credit cards. Utilization is the second highest component of how scores are calculated. So if you're not showing usage, how can they determine how responsible you are with credit? Right? Credit is, I borrowed money and I'm paying someone back.

The person who you borrowed money from, once their money, not just back, but when they want it back, like on this date, I want my money. So it's not just about can you pay back? That's easy. Can you pay back when the people want their. Payment history, the highest component of high scores are calculated. What does that mean?

How on time you are is great. How late you are is bad. Collections are bad. Charge offs are bad. Repos are bad, bankruptcies are bad. And they weigh the most, so they do the most damage. Okay, so I wanna just touch on the two things that are the, that weigh the most. Your payment history and your useless. So you need credit cards.

Okay. Well, I keep applying everywhere and everyone's denying. , it goes back to inspecting. If you don't have favorable credit, don't apply for the black. Okay. You're not gonna get that. Thank you. You're not gonna get that Stop making for the cards. They give all the perks. Yes. You are not perk worthy right now.

Okay. , you have bad credit or no credit, so I don't know how responsible you are or, or I've seen how irresponsible you've been. So you're not gonna get cards with cash back and airline miles and stuff. You gotta work yourself up towards that. But there are cards for people like you, so just do a little bit of research to see what cards are out there for people in my.

Okay, just like I'm not gonna apply for a credit one card, and I'm not trying to crap on you guys, but I have great credit. My score's over 800, I have over $150,000 of available credit. I'm not gonna apply for credit one, I'm not gonna apply for a secured card. . I'm gonna apply for cards for people in my situation.

So don't run up. So many inquiries just apply for everything that comes in the door. They just want you to just apply. and they want your money and they want the interest from you apply for cards that fit your situation. So do some research. So

[00:08:29] Naseema: yeah, so I like tools like Nerd Wallet and a few other tools out there because you can kind of plug in your financials and they'll give you an idea and they'll tell you how likely it is for you to get these, those cards.

So like, if you don't have any other resources, like don't just. , try to figure it out on your own, just like Shante said, because more tell more times than not, you're gonna get turned down. So if you look at resources like Nerd Wallet or Credit, I dunno, credit Karma, they have the same kind of thing where they'll give you like, Hey, these are the kind of card that with your people, with your credit score, typically have a high chance.

A high chance of getting approved for. So start somewhere like that. Yeah.

[00:09:16] Shante: But also be careful cuz those are nothing but paid advertisements. They don't know what you have a high chance, like they're people, they say excellent odds and then they apply and they didn't get it because they're just telling you, they, they, they haven't even looked at your credit report.

So how can they tell you what you have high. You know, favorite. So, I mean, again, I know people use those as G Guides, but they also think that they're like mm-hmm. concrete, like they said excellent odds, and I was denied. Like, okay, but they're just guesstimating based on the little bit of information they have on you.

So yes, that's a great start, but also research beyond that. So I'm not saying don't use those, right. But I can tell you that I got an email the other day where they offered me a card that I already. . So if you were basing it on information you have about me, you wouldn't tell me, Hey, try the city double cash.

I've had that card for years. Or you have excellent odds in getting this Discover secure card. I banner with the 800 score. So you gotta kind of, again, it's, we're both saying this to say the information is out there, but do your due diligence when it comes to. Making this next step, which is stepping out there and applying for things.

Because having multiple inquiries on your report with nothing to show for it also looks bad. So a lender will pull your report because you apply with them and they say, well, she is applied for seven things in the last month and nobody gave her credit. Yeah, we gonna back out too. So just be careful. But you gotta start, you have to apply for credit.

You can't build credit. obtaining credit, and you can't obtain credit without applying, so don't go crazy, but don't be scared of applying for credit as well. . So that's one of the major things you apply for credit and use credit, use it responsibly. Mm-hmm. don't show too much usage, even though utilization is the second highest component.

Showing none hurts and showing too much hurts. They need to see that you're, you know, responsible. So they have percentages, they don't really wanna see you go over 30% of your limit and blah, blah, blah. But, and there's ways to do that. So first step is inspecting your. Obtaining credit and using it responsibly.

It goes a lot deeper than this, but that's really one of the first things that you should do how long you've had credit. Established is another good one. So, you know, make sure that you're not open and closing, open and closing. A lot of people think apply for something, use it, and then close it out when you don't need it anymore.

And I'm like, who's going around teaching people that you need to show, I have, my oldest daughter is like 14 years. You know, other cards I've had longer, but they've closed and they're off my report now. But they want to sing longevity. If you have perfect credit, but you're only a year into building credit, you still look risky to a lender because they're like, well, how long can she keep this up?

12 months is easy. Can you do 36 months? Can you do four years? So there's a lots of lot of ins and outs to this whole credit game, but if you learn the rules, you'll win the game every.

[00:11:57] Naseema: What about people that say that credit cards are bad and you just shouldn't use credit at all?

[00:12:02] Shante: The way people use cars are bad.

The cars aren't bad. . And I know that came from Grandma Cash. Only grandpa say Uhuh no credit. It's because they ain't know what they were doing either because their parents didn't teach them. So we all just keep growing up in adulting and generation after generation. We're all adulting blindly. We don't know what we're doing, but we have student loans, we got car notes, we.

Five credit cards and we don't know what we're doing. And then we're checking Credit Karma for scores. We'll talk about that a little later. And then just, we're not looking at the right thing, but we don't have the proper education. So I love people like my girl right here, who I'm talking to, who is so passionate about the information getting out to you guys so that you guys thrive and that you guys win.

You need credit. I just said utilization is the second highest component. So you need credit, you have to use it. People say, I was in major debt. I finally got myself out. It took years and I cut all my credit cards up. No more credit cards. Why is my score dropping? You don't have any anything to show.

You have to borrow money to show credit worthiness. Cash, yes, is great, but it's not showing that you can build credit. It's not showing that, yes, I'm responsible. When I borrow money. It shows that I can work a job, get paid and pay for things I want with my cash. that's not showing credit. So yes, please use credit cards.

And she asks that great question because I'm sure she hears it all the time, and I do too. So use credit, but use it for money that you have already. That is what I wanna hone in on. Don't borrow for things you don't have the money for. If I don't have the money, then I'm not buying it. And here's the thing that, that people don't get.

You have a billing cycle, every credit card does, and then there's a due date. Your due date is about 25 days after your cycle closes. They say, Hey, you, we know we, you've borrowed from us. It would be very unfair for us to say, you owe us the money back in the week. So we give you about a month. But that month gives people, Hmm, I have the money, but I need it over here.

So now you spent the money, you charge, you charge something for it. Then when the bill comes, you don't have it all. So you say, I can just pay the minimum. They're not giving us that minimum payment because they like us. They're like, oh, okay. You bought something you couldn't afford and you can't pay us back, and that's okay.

We gonna make more money off you for, for borrowing from us and not giving us the money back when we said we want it. They want it on the due date. Be able to pay in full on the due date. The only things, and yes, I'm trying to get us out of that too, cuz we all want wealth that you should be paying interest on are like huge purchases that, you know, you're not gonna have the cash for, like college education, a home or a car.

And those are still, you know, we're all trying to get to the point where we can throw cash at these things and not have to worry about it. But going to the store and, and buying something on sale, how much of a sale did you get if you're paying interest?

[00:14:45] Naseema: That's why I say 25% off is 75% off. Like stop playing.

Say it like, and, and if you pin some credit card on it, it's probably 0% off and you probably paying more than it's worth because now you paying interest on it. So it just doesn't make any sense. And I always

[00:15:03] Shante: tell people, people always look at when is it due and how much is due. They don't look at how much of that money they paid is actually going towards the balance and how much is going towards the interest.

They don't ever look at those figures. They. , when is it due? How much is due? You have to look at that. I had a client. All her credit cards that were active and open that had balances. I had her write all the amounts that she paid in interest on one card. I said, so open your Capital One statements and write down every month for a year that you paid interest.

So you should have 12 amounts on your piece of paper. She said, okay. I said, and then after you do that, do that with all your cards. She was like I said, right, if you're gasping, you already know , that you're not using your car's property. Right. So at the end of the week, she emailed me and said she had $2,900 and just interest paid in.

She said, I could use that to pay off these collections. You think? Would you write a check to a credit card company randomly, just here's $35. I just feel like being nice to you guys this month. You wouldn't do that. So why are you allowing them to take money from you just for paying for something you couldn't afford to?

So yes, use credit, but don't I use all my credit cards except two for my bills? So every bill that I have, I link it to a credit. That way, I know it's gonna get used every month. I'm keeping it under the percentage that FICO wants to see and I pay in full. I'm not paying interest on on gas or cable or Fios or my cell phone.

If I don't pay interest, paying them directly, I'm not gonna pay interest now because I'm charging it, right? Mm-hmm. So I charge it, it serves, mm-hmm. rep purposes. It's showing utilization. I'm getting cash back in perks, and it's also showing that I'm a great. Okay, so use credit cards for things you have the money for, not things you think you're gonna have the money for in 25 days.

Cause I told you the bill's not due for almost a month. You should be able to take credit card, pay for something and think in my brain, if this was due tomorrow, I would have the money. Not I'm gonna have it in a month. You should have it then. Technically, we know it's not gonna be due tomorrow, but start to use that mindset that will help you not to charge things that you can't afford because month after month, those charges add up.

So yeah, maybe yesterday you only used it for dinner with your girlfriends. The Sunday was a brunch. and then the next weekend was a sale at Macy's. And then next thing you know, it's $800 on the card for only 30, 30 days of usage. So just really be careful guys. I know , we all love shopping. I use

[00:17:32] Naseema: Right.

What helps me with my accountability for credit cards cuz it's kind of hard. It can be kind of hard to remember, especially if you use it for daily purchases, like things in the grocery store. So my budgeting app, what it does is automatically takes the money outta my budget and puts it aside from my credit card payment.

So I, I use yab like you need a budget, and as soon as you pay something to charge something on your credit card, it automatically, if you have like your food category, it automatically. Ducks that from that category and puts that payment onto your credit card to make sure that you have it. And so I

[00:18:07] Shante: think what uhhuh , look, I'm an expert and I'm like, it does all of that.

I never knew because I need that. I need that ,

[00:18:15] Naseema: right? But I mean, it doesn't physically do it in your bank account, but it doesn't in your budget. So then you know, I only have. $50 left in my food budget cuz I already spent it. And now that money is already allocated to your credit card. So it makes your credit card balances.

It'll show how much you have available to pay towards your credit

[00:18:32] Shante: card. I hear people talk about why they all the time, I'm like, ah, yeah, yeah, yeah. I do my little budget on my piece of paper, but I love that, so thank you. I'm gonna sign up for that. Yeah. Yes. Thank you. I don't use debit card at all. I use credit cards for everything.

Mm-hmm. so it's hard when you have nine credit cards. What's do what's

[00:18:47] Naseema: here, what's there? Yeah. That was, and that's the biggest challenge in budgeting is kind of trying to figure out what's allocated. And I know it took their program. I know some time to figure that out in the back end because that's not something like if you have a paper budget or even an Excel spreadsheet, it's hard to do to figure out credit cards because they're not immediately due.

But it basically creates a little bank in the app where your money is going and it shows that. Okay. I've taken out this $5 from your food budget and put it into your credit card. So now it's spent there. And then the other thing I like about YAB is they have incredible. Tutorials, even on the app, you just tap on the tutorials and they'll say like, how paying for credit cards or paying for things on credit cards work and it'll walk you through the process.

Oh,

[00:19:33] Shante: I love, I mean, I, like I said, I've never really dug, dug deep into it, but I see people in my group ask about it and people say, I've been using it for years. I'm like, yeah, yeah, yeah. But I love that because here's the thing, so I have all of my credit cards linked to. and then I have two that I use everyday spending like just whatever, but, right.

Mm-hmm. . But I'm not the most careful with making sure it's set aside. So then at the end of the month I'm like, yeah, 2,700. It's like half . Yeah, I have it. It's like I don't wanna pay all that at one time. So like, it's like for you, like using that app. It's like if I know weekly this is how much I would need to cover that, then I would pay week.

Like I would pay it weekly. Cuz it's hard to see that amount. Yeah. At one time. And I'm like, oh my

[00:20:12] Naseema: God. Yeah, yeah, yeah. And then you like, oh, I need to tighten up on my groceries. Like, I already spent this much on groceries. Like, and, and right now girl, I'm, I'm in like straight, like I'm looking at every single dime cause I'm about to go on maternity leave and that money's gonna be cut.

I'm like, lemme make sure I'm not overspending because you know, when you got it, it's just like, okay, whatever. But. Yeah, it's so, so easy. And so I've been going through and being like, oh no, we this close to this grocery budget. Let's figure out some strategic ways, like what's in the freezer? Like, what's going on?

Because I got too much to, and it's, it's only

[00:20:47] Shante: three of us in here, and I'm like, why are we spending $800 on grocery? Because I don't, I don't have a grocery budget when we need stuff. I just go, it's, and Instacart is not helping. I don't go in the grocery store that, oh, exactly. Click, click. It's like, would you like to buy again?

I'll go to the buy again section and just click down everything. It's like you don't need all of that. Seeing it cause Thank you. Listen guys, I'm being transparent with you guys too and we all, you know, we all fall. So to the Gloria, you know, but but yeah, it's, it's really serious. Like, so just because you have it doesn't mean that you shouldn't be budgeting either.

So take it from us. . Yes, exactly. So circling back, so you know, you got the inspection, you need to see where you're starting. Get credit, obtain it, use it responsibly. Don't go over your you know, 30% of your limit if you if you can help it. And and then trying to like, create the history with your credit.

Don't open the lot in a short amount of time because you look debt thirsty and that looks less favorable. If you want more available credit, start asking the cards. You already. For increases. Don't just keep applying for things you don't need 15 cards. Well, I have more than that, but the, it's been over the course of years.

Store cards. Mm-hmm. , if you know you are not the most responsible and you do retail therapy and you shop when you're depressed, do not go get these store cards because you can only use them at that store. Okay. And if you don't have the money for something and you have to charge it, it better be something you need to.

Like, I need groceries for me and my kids. The lights need to be stay on. I have to pay my child's tuition for school, even though we should be building savings. And I know that's a topic she's touched on before, and that's a different topic for today. But the, the store cards get us in trouble because you can only shop at that store.

And I'm depressed. I, I need to go. Shopping, I feel lonely or sad. And then you have all these clothes. Did they make you feel better? Really, when you get that bill, you feel worse. And so think what's the end in mind? when, when you're a little depressed and you wanna shop. Yes. Think about, am I gonna feel happy when I get this bill?

But yeah, it's like try to get those major credit cards that you can leverage and use multiple places so that you can build those, yeah, those airline miles and build those points. I live in the DC area, I've flown to. San Jose California and Miami and Orlando and Columbus in one year. Just using my Southwest points because I use that card for everything.

Mm-hmm. , I don't care if I'm just going to get a sandwich from Subway, I use it for everything because it's building those points and I pay in full when it's due. I'm not paying interest on. That you eat and you poop out your butt. Same a month before the bill came and now you're paying interest on food.

That doesn't make sense guys. Let's, let's be really smart with our purchases. So that's the

[00:23:27] Naseema: kind of same, I have to say, I have, I used that Southwest card. I can't remember the last time I spent money on a Southwest flight. And I, and it's me and I try usually travel with my kids too, so we rarely use it.

So like the combination of rapid rewards points in that Southwest card, cuz my kids got hella points cuz they love it. So we have Yeah. . Exactly. So yeah, that is a great card. But that's one of those cards that actually full transparency. I didn't qualify for that card. Until maybe like, like I said, I filed for my bankruptcy in 2010.

I didn't qualify for that car for a very, very long time. I think maybe like three years ago was actually when I qualified for that car. So that is one of those cars. You ain't just gonna go out here and just get, cuz it's, it's Chase. It's one of Chase is higher. Yep. Reward hire tier cards. And so it's really hard to get, but Chase does have cards like that have a little, a lot less barrier to entry.

So you know, you have to, that's why you have to understand the game and there's so many risks, resources out there to understand what credit cards you can get at different tiers. But yeah, you have to understand that cuz you ain't gonna get qualified and believe me, I, you could have benefited from this card a long time ago, but I could not qualify for this card for a long time.

And they say that bankrupt, they don't look at your bankruptcy really. But anytime, like I would always, I would always ask for what are those people called that you can call and talk to you want reconsideration. . Mm-hmm. . Yeah. The reconsideration people I used to always call and be like, everything else is perfect except for this bankruptcy.

And they were like, well, that's not necessarily it. And I'm just like, it is, because after a certain period of time it just, it, they were just like, great, you can have it, and then here's free tickets. Here's your companion pass too. You know? I'm just like, ok, I see what it is. But yeah, it's, oh. Yeah, it took over

[00:25:28] Shante: 10 years.

Thank you for saying that. When I went through mm-hmm. , I went through cancer. I was diagnosed at 22 with stage three cancer. And because I was getting my chemo and ther and radiation, I wasn't able to work full-time. So I charged up a lot of credit card debt, just trying to live and stay afloat.

And and then when I was trying to rebuild after I was, you know, in remission and everyth. I, the credit expert had to get a $300 secured Make America card just to try to like re with, with a $29 annual fee. Might I add just to try to build my back damn hundred dollars secured in the annual fee kick rocks.

But anyway, it helped me. So, and I'm gonna touch on something before I know we kind of wrap up. now I have, you know, 20 credit cards, a hundred, $200,000 of available credit, you know a 800 something credit score. So I'm, I say all that to say, don't look at those little cards and be like and crap on them.

Like that was a stepping stone. That was a too for me. Now of course, once I got better cards, I just, you know, did away with that card. And yes, it's still on my credit report, even though I closed it out. Cause I'm like, why would I keep a, now they did unsecured after a year. A $300 limit. They never raised it.

And an annual fee? No, I don't think so. So I did close it, but that history is still on my credit report because it will stay for another 10 years after my last payment. So the myth that you shouldn't close credit cards cuz you lose the history. No. Remember what I said at the beginning? Your credit score is calculated based on the information on the report.

If it's still on your report, then all that history counts toward. Your credit score. So yes, when you get in a better position, it is safe to close those cards out. You're not gonna lose the history. But yeah, you need to start out with cards that are for people like you , and use it as a stepping stone.

Don't feel embarrassed about it. Oh, I had to pay $500 to get a secure card. Okay, great. Use it as a tool. Okay. Yeah. I, I just don't, I want you guys to, to, to, to learn these ropes. Start learning, start researching yourself. Yeah. Even you hear me talking, I could be saying a whole bunch of BS to you guys right now, but I'm not, but even say, I heard Shante say something about this.

Let me go look it up. , I heard her mention this and let me go. Yes, and, and even still be careful about what you look up cuz everybody on Google ain't the expert to you, . So just really be careful. Do some research. Compare what one article is saying to another compared to what I'm saying. You know, but really the rebuilding and repairing process, it's scary, especially if you have no idea what you're doing.

But once you have a roadmap, most people feel really comfortable. You know, jumping out there and getting started. If I'm, if I don't know where I'm going, I'm never not using my G P s, okay? I'm not gonna just get in the car and be like, all right girl, let's figure it out. Now I might make it, there may take me seven hours if I use a gps, and it took me 45 minutes.

So stop guessing. Stop. Holding back your progress because you keep spending too much time trying to figure it out. They are experts out here who you can enlist their help and I'm not, you know, some of them want your money and you can vet those ones that you can tell are just genuine and really wanna help you and teach you what you need to know, not only to repair and rebuild, but maintain it.

I'm not here to teach you how to fix your credit. So you get the house and then you get in the house and now your credit's messed up again and now you're hiring me again. No, I teach you so that you don't need me. That is the goal. I wanna push you outta the nest little birdies. So learn it and do it.

Football coaches are not on the field playing with the players. The players come off the field. The coach tells 'em go what to do, and they do it and they win. So you need to learn the rule. Yeah. Get with the coach if you need one so you can go out there and win the game. Yeah.

[00:28:57] Naseema: Can you Shante explain the difference between a secure credit card and like a credit bill builder

[00:29:04] Shante: loan?

Oh, yes. I love that. So, one another factor in how your scores are calculated is your credit mix. So what does that mean? There are two types of credit that exists, revolving and installments, revolving lines of credit. So if you ever hear that fancy term, it just means credit cards.

So how many revolving lines of credit do you have? How many credit cards do you have? Think about a revolving door when you walk in that door. You walk in, you walk out, you walk in out, and if you never leave, you just keep rotating. Same with credit card. You use it, you pay back, you use it, you pay back.

It's an open revolving account. Installment lines are fixed payments. So imagine a contractor coming to your house installing a deck. Off your porch. And then when he leaves, you're like, yeah, I don't really like it there. I wanna push it six feet over. It's installed already. It's fixed. You can't change it.

So those are like mortgages. It's the same amount you pay every month of personal loan, your student loan, your auto loan, every, so that's fixed, right? So FICO wants to see, can you handle a healthy mix of revolving and installment, because how you pay them is, is very is greatly different from each other.

So, Insured card is a credit card. It's a revolving line of credit that the lender says, okay, your credit is bad, but it's not bad, bad. So like, we trust you, but we really don't, but we do. So what we'll do is extend you a line of credit, but you have to give us collateral. All right? So if you want a $300 li limit, you give us $300, we'll safely put it in the account for you.

And now you can use that card the same way you would use an unsecured. Okay. A lot of people confuse secured cards with prepaid cards. It's not your money that you giving them, and every time you swipe, it's deducting from your money. And when you pay, it's replenishing your note. It's set aside for you.

That is just collateral to say, I promise to use this card responsibly, and here's a good faith amount to show that. Right? And so, Lenders have secure cards that do eventually become unsecured and then some don't. So the only way to get your money back is to close it out. And remember what I said, if you get better cards way down the road, close out that secure card, get your money back, but try to get the ones that graduate to unsecured.

That way you're not closing cards out. So that's a secured, revolving line. So she asked about credit builder. Let me give you an example. Two companies that I partner with are Credit Strong and Self used to be called Self Lender the way they work. So a lot of people say, well, should I take out a loan to just show good credit history?

And I'm like, so you gonna borrow money that you don't need to pay for things you don't need just to show good credit? No. Like if you need a loan, sure, but not just for that reason. So credit. Credit strong and self lender said, you know what, Rick? We wanna help these consumers out. So we're gonna partner with some banks, okay?

And they're gonna apply with us, and they're gonna choose a term 24 months and choose an amount $1,000. So they're gonna give us $48 every month, and we're gonna put it in an account for them. So it's almost like a savings too. So we gonna build that credit and save up, right? So two birds of one stone.

But it's gonna help build their credit, because when we report to the credit bureaus, it's gonna look like a regular, traditional loan. Nobody's gonna know it's us. It's gonna say Austin Bank, it's gonna say whatever bank that we partner with. So to a lender, it looks like, Ooh, Shante got a loan. She's paying on time every month.

Okay, look at that now. You know? Mm-hmm. I'm just paying myself. , that's why they call it self lender. You're lending the money to yourself. Credit strong. I don't know where that came from, but we all want strong credit. So it, it's, it's, it's a savings account and a credit builder account in one. So you're not borrowing money to pay for something you don't need just to show that you're making on time payments for a loan you didn't need.

You're paying yourself. And then at the end of the term, guess what, you get that money back with very, very little interest. But an account like, It's a no-brainer. You know, if you don't need that account, if you don't need to add to your. Do not sign up for an account like that because people do that.

Because, you know, one of my clients didn't have a good mix. So when she added self, her score jumped. Another client said, I added and it didn't do anything. I said, well, why did you add it? Because I saw somebody else do it, and I'm like, you didn't need it. Let's talk about what a credit mix is. So we run over her credit report Now, did you need that?

No. I said, okay, close it and get your money back. But it's really to help you if you need to show a good. Some stronger payment history. Maybe you screwed up in the past and you're trying to just show that. And it's easy when the money just comes outta your account and it's, you know, you know, I'm going into an account for you.

So at the end of your term, they send you a check or they self direct the positive. But it's an amazing tool if you need it. . if you need it. Yes, I did it because I didn't need it, but I said if I'm gonna introduce something like this to my audience, I need to test it out myself first. Yep. So I did that.

I think I picked a 551. I got my money back at the end of the year. I went to Vegas . You know, like I, I forgot about it cause it's kinda like outta sight outta mind as well. So I will say if you don't need it to build your credit, but you have a hard time. Proactively do something like that where it takes it from you and you're not even really thinking about it.

And then when they send you that check, you put that in a savings account, you know, and then just kind of rinse, repeat. A lot of people do it also for the Christmas holiday. Christmas comes at the same time every year, y'all, why? Y'all act like y'all so shocked that December 25th is coming. It's on the same date and month every year since Jesus.

Okay. So , you know, but people don't save. They just wait till November. Friday. Then they charge up everything for Christmas, and then they're still paying that bill the next Christmas No lies, okay? Mm-hmm. . So yeah, that's a great question. And a lot of people, again, they see people sign up for that, it looks great.

Their scared scores are going up, so they do it too, and they don't even know what it, how it works. And so stop signing up for stuff that if you don't know how it's supposed to help you guys.

Yes.

[00:34:52] Naseema: So let's, let's just do a recap before we wrap up. So if you need to rebuild your credit, are you starting from scratch? You need to, well, let's talk about rebuilding. So you need to investigate like your credit report, like why is your credit bad? Figure that out. Then we have, then we can create a roadmap on where to start.

You have to build your credit by using credit, so you have to get some credit lines in place. But apply for the credit cards that you qualify for. And that's gonna take some research also, like your group, Shante, your Facebook group is full of resources and a great place to ask questions like if you don't know.

So that's a great place to start as well. When you are using these credit cards, number one, like secure cards and the credit builder loans are great places to start, but when you're using your credit cards, make sure you're using them from things that you can pay for and not balling out just because you have this credit line available for you.

And then just continue to do. Over and over again. Rinse and repeat. Rinse and repeat. And that's how you grow your credit or rebuild your credit. Perfect.

[00:35:57] Shante: And the only other thing is just cuz everybody love that score. Understand where that score comes from. If you know how to, I ask you all the time. Tell, I'm ask you tell me three different ways to come up to the sum of 12.

So how, tell me three ways we can get to number 12.

[00:36:14] Naseema: We can do six times two, we can do a four. Mm-hmm. plus eight. We can do, look at that

[00:36:23] Shante: 10 plus she told me, but it's, I can calculate the number 12 in three different ways. So I say, I asked her how to get to number 12. You say, I wanna get to a 700 score.

And I say, okay, tell me how those are calculated. I don't. We have to know that guy. Really look at how scores are calculated, because if you know how they're calculated, then you can say, I don't have a good mix. I didn't even know that was a, you know, oh, my usage is really high. Let me get it down. Well, I did miss that payment, so I know I dropped 30 points.

But let me focus on my payment history. You can figure out why you're scoring the way it is, if you understand how, how FICO came up with that number. It's not like the lottery guys. It's not some ball rotating numbers and they give you, okay, I'm gonna give her a seven, two, and a five. That's her number for tonight.

No, it comes from somewhere. There's a calculation, so it's all about education and research.

[00:37:14] Naseema: Okay. And let people know if they wanna join a challenge by the day, how they can join it, and how they can get in

[00:37:22] Shante: contact working. So if you're in my group, you can just type the 30 day credit challenge in the search and the post will come up.

If you're not, you can visit my website, financial common sense.org since it's spelled C E N T S, like money. And then you can click on the credit. 30 day credit booster G p s challenge. And so it's gonna be amazing. It's gonna be an exclusive group where the sessions are gonna be held, weekly giveaways and prizes, a exclusive GroupMe chat where we're just gonna be chatting all day long and answer.

I'm gonna be answering questions and I'm gonna tell you if y'all inbox me separately, I do not answer questions via inbox. It's too many people in my group for that. But if you are in the challenge, you have me for 30 days, so you better take Advantage and you get a 90 90 page guide that's gonna help you from beginning to end.

[00:38:11] Naseema: I love it and I'm gonna join the challenge just for fun because why I, it is never enough. Like I can't learn enough about this and so I geek out on it and so I'm gonna be in that challenge cuz hey, whose credit can't use it.

[00:38:26] Shante: So mine too. I'm still trying to get the eight seconds. You'll see

[00:38:29] Naseema: me in the group.

You'll send me in the group. But thank you again Shante for dropping. Jens as usual, make sure I'll put all the links in the bio. Make sure you click those. Make sure you're in Shante's Facebook group. Where are you at now? 300,000. I

[00:38:44] Shante: would be, but my block list is strong. I don't just accept any old body, so I don't.

1 0 3. 1 0 3. Just a little, little humble brag.

[00:38:52] Naseema: Hey. Yes, yes, yes. . Thank you so much.

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