Let me tell you a little story, its principle character is me, but it could have easily been you!
I was just out of college and had a decent, but not well paying job. My dad was always getting those “Get Rich Quick” books and self help guides and one book that caught my eye was called “Using Your Credit Cards To Get Rich” (or something like that). In any case, the short version of this book simply stated that whatever I owed on credit card #1, I should pay with credit card #2. When the bill from credit card #2 came in, pay it with credit card #3 and so on and so on. The whole idea was that I was always making payments, but not from my own money.
Well the idea sounded good but several months down the line I realized that I had a growing balance on all my credit cards and couldn’t afford to pay them all off. What the book did not say was that once you started this, you should not be using your cards for anything as you were just increasing your balance. Also it did not mention that cash advances were the highest rate of interest that had no grace period, so even if I have never used my cards after the first time, the interest charges were adding up fast.
If the ever-mounting interest wasn’t an insult enough, the rude awaking was when Sear’s denied me credit.
Well, there I was with an accounting degree, was beginning as a financial planner with a major company and a bankruptcy was out of the question. A financial planner that was bankrupt did not look good and I would have been let go. So I put everything that I knew to practical use. After a while I had brought all my balances down and I was paying my cards in full every month. All the money that the card companies were making off of me for years came to an end.
During the years of helping clients create or restore their credit I learned that there are many “fake truths” on the street that keep you locked in the credit dungeon forever.
FAKE TRUTH #1: Your credit can be repaired over night by an attorney or credit repair company.
FALSE: Whatever your situation, it takes time to correct and reinforce your credit situation. Many sources will charge hundreds if not thousands of dollars and do nothing, or something that you could have done yourself. In fact Eileen Harrington, Past Deputy Director of the FTC's Bureau of Consumer Protection had this to say: “Credit repair schemes are a big problem for consumers. Credit repair promoters generally charge hundreds of dollars, but don't deliver on their claims." However, as your credit coach I work hand in hand with you to create, correct and reinforce your credit situation!
FAKE TRUTH #2: You can’t fix bad credit.
FALSE: There are two types of bad credit. Misinformation or errors in your history, and correct information that is just plain old damaging. The truth hurts! Plain fact is that mistakes and misinformation can be corrected with work. Even correct information that is negative can be improved! I can show you how.
FAKE TRUTH #3: There is only one credit score.
FALSE: There are three major credit reporting agencies and each one has a score and a different way of scoring you. Looking only at one agency will not give you your complete picture and your score will determine how much you pay for credit, insurance even if you can get a new job or an apartment.
FAKE TRUTH #4: Checking your credit score will lower it.
FALSE: Well, almost. There are three types of inquiries (every time someone looks at your credit). There is a hard inquiry which is when someone that is not already a credit provider for you, takes a peek at your history. This could be a credit card company looking to give you a card, a cell phone company that you are looking to get service from, etc., etc. These inquiries impact the most on your score. The second type of inquiry is a soft inquiry. This is usually when one of your credit providers looks at your credit in an effort to raise your limit, or issue you new credit. These inquiries will only raise your score slightly if at all. The third type is a self inquiry. This is when you check your own credit. This will not raise your score at all.
FAKE TRUTH #5: Shopping around to buy on credit will lower your score.
FALSE: Again, almost. If you were looking to buy and finance a car and you went to Dealer A, then went across the street to Dealer B and then down the road to Dealer C and each one checked your credit, as long as you made a purchase within thirty days, it would not affect your score. However, let’s say you went to Dealer A and Dealer B shopping for a car, then you went to a furniture store and they checked your credit to finance the purchase, then you applied for a credit card at the electronics store and so on, yes your score will be affected.
FAKE TRUTH #6: The way to improve my credit is to remove all the negative information.
FALSE: This is only part of the picture. You cannot permanently remove all negative information, especially if it is true. However I can show you how to put new and improved information that will bury the bad.
FAKE TRUTH #7: Interest rates are the same wherever you go.
FALSE: Go to Bankrate.com and you can explore interest rates from everything from a car loan to a mortgage. Rates are not the same for everyone. People with good credit will get a preferred rate, while people with challenged credit will always pay more, IF they can even get credit. Some property managers will not rent out a unit to a person with questionable credit. Auto insurance companies can bump up the rate for people with speed bumps in their credit and try to buy a home with “iffy” credit and you will find that if you can get it, it will be very expensive with higher interest rates, more upfront fees, greater closing costs and even higher insurance rates.
FAKE TRUTH #8: If you subscribe to a certain service you will never be a victim of identity theft.
FALSE: There’s a saying that a lock was meant for honest people. Simply stated is that there are many services out there that claim to block identity theft and often cost hundreds of dollars every year. I can show you how to get your credit report for free, how to get credit protection for free and what to do if your identity has been used against you.
The bottom line is that you can chose to do nothing and the problem will never go away, but get worst. You could also spend hundreds if not thousands of dollars with questionable results, or you could hire a credit coach to guide you through the credit maze. Learn what you need to know for now and forever.
Call me today and see results in as little as ninety days (often sooner).
Download my free report "Credit Crusher" and learn to navigate the seedy underworld of credit. Then contact us for a free consultation.