And now it's time for the b a q a b a q the b a q A. I would love if somebody made us a b a q a theme song. I'm going to reach out to like Chris and his wife again because they made my Budgetessa budget liesta what was it? Look at me? A budget has to breakdown theme song.
Yeah, it's so funny that you say that, because I texted my little brother over the weekend. Uh is a musician, you know, in his partum whenever he feels like yeah, you know, he used to go by Rain in college, but he's dropped that moniker and now he's just whatever he is. And he and he's in Atlanta, and I was like, there's got to be some great you know, yeah musicians in Atlanta. So he's on the lookout. I don't want him to do it, but he's acting like,
I don't know, this is like jingle. I don't really do jingles. Oh, come on, Rain, he's very Yeah, he's so sensitive about his music. I shouldn't even be talking about it.
Wow, I'm it's amazing.
I'm pissed at me.
No, I'm sure it's amazing. Honestly, that would be great to have a Baqa theme song. I mean, just a prohibition theme song in generad would be awesome.
I mean, but hearing you sing it is never get.
All right, we have questions. If you have questions, we semight have answers that are not to be taken as professional answers. They're really supposed to be answers that you know you could take with the grain of salt and then reach out to the Yeah it's just for fun sies, Yeah, exactly, suit your grandma. All right, So first question, I read the right question. Bianca says, Hello, ladies, love your show. Thank you for giving out the wonderful advice you provide
for free every week. A few years ago, I got into some serious debt and eventually used a financial debt services company to get it paid off. All of the accoun were settled. There were seven credit cards total. My credit score dropped a bit low, and now it's a six fifty. That's actually not bad, siss. I was wondering what might be the best way to increase my credit score. Now I know now the mistakes I made before, so
I'm not afraid to use credit. But I wasn't sure what the best method would be, so it could be, Yanka, I have a bunch of things. But what do you think, Mandra.
Well, I thought maybe because I know you talk about this a lot. So as far as settling accounts that stays on your credit report as well, does that take like seven years to fall off?
It does?
Yeah, so she's a few years in so it's been there for a minute. Yeah, that was my first question because I'm just curious how all of that works.
Well for two years, it will It'll be things are most harmful or helpful within the first two years. So after two years, it doesn't mean that it's not there, but it doesn't play as big of a role on your score.
Yeah, she says, I know now the mistakes I made before so afraid to use credit, but I wasn't sure what the best method would be. Listen, learning from your mistakes is good because seven credit cards is a lot and having to go through the stress of getting that, you know, even if you're you handle it, which is great,
like you take care of business, you know. My first thought went to a secured credit card, me too, Yeah, here ay, because with a secured credit card, it's it's complete opposite of a regular credit card, which is unsecured, which means that you don't have to put up any money. They just give you account. They give you a credit card with with the with the limit, and you know, they take your word that you won't that if you, you know, use the card, that you'll pay it back.
With a secured card, they require a deposit upfront, and you know, you put that money, let's say it's five hundred dollars or whatnot, you give it to the bank and they hang on to it and that is their collateral and they basically issue you a quote unquote line of credit in that amount, and then you can use that card to make a purchase here and there, and then you pay it back. And if at the end of your term, like what is it usually a year, m right, they will return your deposit to you or
they'll hang on to it. If you didn't make your bills on time, hopefully they returned the deposit to you. And well what happens is month to month they will report that good behavior to the credit bureaus. So it can help you, it can help you rebuild. That's one idea.
So another idea, because credit bureaus like to see like you have different types of debt that you've managed. So credit card debt is called revolving debt because it never really closes, just keeps revolving. Right, So there's also I just had at the tip of my tongue it's revolving debt, and then it's not I'm not stationary, no evolving debt. Basically loans, but I forget the technical term for loans. Basically it's it's debt that you pay that you pay
off installment installments. I was gonna say yes. For some reason, I was thinking departments. I don't know why, department. I was like the department store, ya sidebar? What I text you to be like Mandy, where are taping? It, says mandrake, And I meant to say mandra but for some reason, my my autocorrect was like mandrake.
I was like, oh lord.
So anyway, that's just how my brain is working today. Installment loans, So, an installment loan was basically any loan that like, you pay off an installment. So think mortgage, think car note, think student loan dead you know, so one way you can do an installment loan that is I call it like the loan fake out is they call the credit builder loan. So for example, they're company
like like a a self. They used to call themselves self lender, right, so, but also credit unions have these two So if you're part of a credit union, they likely have a credit builder loan. But if you don't self as a company that you might look into. So the way it works is you say, hey, credit union or self or whatever, I want to do a credit builder loan, and they say, okay, you choose the lowest amount. That's just my suggestion. And I know on self is
five hundred dollars. I think I don't know what it is at credit unions, but let's just pretend it's too hundred. They let you borrow two hundred dollars, but you're not
actually going to get the two hundred. They're actually going to keep that two hundred for you in a savings account or a money market account, but still on the books, it looks like you borrowed it, and then over the course of a year, you're going to pay that money back each month, you know, So if it's five hundred dollars, divide five hundred dollars by twelve months and at the end, so one it says, hey, it's Bianca, right, Hey, right, Bianca borrowed money and she pays it back monthly on time,
and at the end of the year, she paid it off in full. So you get these like these boosts of like she paid it off and she paid on time and so and then at the end of that year, you get your two hundred dollars back, plus the little bit of interest it accrued, you know, because you remember you never actually got your money, but you paid it back. And so people sometimes use these credit builder loans also as for savings. So I remember I did this whole push.
We're like in November, Like, hey, sign up for a credit builder loan in November if you're looking to raise your credit. So by this time next year, not only will you have your money in time for the holidays, you know, like your lump sum back, but you'll also have a better credit score to go into the holidays with,
which is great. And so that's another tool that you can use to raise your your credit score, because, like I said, credit reporting companies like to see that you have a variety of ways that you've borrowed, and so revolving that installment loans are two different ways. Here's like a trick that I will tell you how to how to really boost up your the credit card, the security credit card that Mandy mentioned, put your lowest bill on it.
So the gym membership that you know you don't use, Netflix that you know you do use, put the cheapest bill on it. And you're going to say, Hey, Netflix, I want you to charge my secured card every month. And then you're going to say, hey, bank account, I want you to pay this card off every month. And that card you're not using it for anything else. It's not to leave the house, it's not to leave the drawer. It's just sits somewhere inside your drawer and gets paid
off every month automatically. Because when you pay off a debt in full, Bianca, it's like the credit score agencies do like a happy dan. It's like, oh gobiyanka, go byada. Now, whether it's five dollars fifty five hundred five thousand, it's not so much to the amount. It's the habit of paying off a debt in full that jumps your credit score. But you want to be mindful that you don't pay
it off too early. So you're gonna say, hey, credit card, what's my statement date, Like, what's the day that you actually tell the credit bureas bianca use the card because you want them to tell that you use the card, so they can also tell that you paid it off. If you paid off too soon, they never get a chance to say that you made you know, you made a good choice. So you want to pay off the card after the statement date, but by the due date.
People always get confused by that. So I think the date is so.
Hard on purpose. It's not y'all's fault that this stuff seems difficult, because it is. They make it hard. It's like the best way to get a good credit score is to like use the tools and know how they work, but then like, I mean, know how they work, but never use them, and if you do use them, use them a specific way.
Yeah, it ish could be really overwhelming, But I'm telling if you do those three things, get yourself a secured card paid off every month in full automatically, and potentially get a credit builder loan automatic and automate those payments as well, then you should see your credit score, which is actually not that bad. A seven six point fifty is not terrible because seven forty is the beginning of perfect credit, So you should you know, you should? You
know see like some movement. I can't tell you when because your credit score is like a GPA, so we'd have to know all your other grades. But just know that any A you get which is paying off in full or paying in general, any A you get is going to offset any f you might have gotten previously.
I love that GPA analogy. I steal it from you all the time.
Yeah, give your credit though, I give you credit.
It's fine, absolutely, and just let time do the rest, because you're a few years away from having those settlements fall off your which sounds like a long long time, but hopefully it'll go by quickly. All right, miss Bianca, thank you for your question. Let me move on to this this doozy of a question from listener Jennifer Colin or colin In emailing us from the Bay Area in San France. So she and her hubby are thinking about buying a house. I think this question is good, so
I've highlighted the essentials. Let me let me get into it. Because Jennifer was she was very detailed. I'll leave it at that, all right. Jennifer says, I love love, love brown ambition not only the good advice and thoughts, but you're both just a lot of fun and inspiring to listen to each week. Thank you, Jennifer alrighty, she says. My husband and I are in our late thirties. We live in the San Francisco Bay area and we're currently saving for our first home as our next big goal.
Our household income has jumped from about one fifty a year to three sixty five a year almost two years ago, and we are making a sizable but late push for retirement in college savings. For our two chill trend. Right now, we have about two hundred and thirty thousand dollars earmarked for a down payment, and that doesn't include our emergency fund. Okay, pause for the snaps. Very impressive, but here's a problem.
We live in a very wealthy area of Silicon Valley where even for a teardown home, we're looking at under two million dollars for that tear home teardown home. Unless my husband's startup gets acquired, which is a real possibility, we'll have to move to a more affordable area to buy a house. But as I approach forty, I really want that house. In all caps, growing up in a black household. Home ownership was a big symbol of security and prosperity, and I'm disappointed that I have not achieved
this milestone yet. I have this crazy idea that we should buy a house in the East Bay area and purchase a cute bungalow for one point two million dollars. We can rent it out or just keep it until we're ready to make our next move. I'm nervous that home prices will go up and up and up and may become out of our reach. All caps again, am I Cray? Cray? Would you go for it and start looking or just wait to see what life looks like in two to three years. Jennifer, Jenny from the Block.
Isn't it a damn shame that you can have all this money and still behind?
That's what's crazy.
This country is crazy.
It is crazy. Yeah, well this is really I'm full of emotions, Jenny, because don't be fool by the rock so that I got, I'm still I'm still Jenny from the Block. I love that. Jenny.
My mom, my, mom, mom.
Okay, we gotta work it out. We gonna let's just talk talk it through because I don't have it. Sometimes I have a definitive yes no, so one congratulations for having that money saved. I because to your point, I actually was just watching, like reading this article. I forget where how although people left California, a lot of people are coming back now, you know post like you know quarantine.
So yes, although you know, certainly a lot of tech companies moved out, but there's still a lot of people there. So I don't know that home people keep talking about a home, you know, home prices crashing, just like the Great Recession. But the truth is, we have very a very different set of circumstances than we had during the
Great Recession that are not that are not. I'm not saying that there won't be a home correction, which is when people's houses that they bought for a lot of money, you know, go back to the price that they should
have been. But I don't know that we're not this is not what it should be because one, our interest rates are significantly lower than during the Great Recession, and we don't have a bunch of people with bad loans like they did with the Great Recession because after the Great Recession there was all this legislation put in place, so we're not in the same position. So I don't
know that. I don't know because part of me is like maybe just finding like you know how sometimes you can, like you can live in New York, or you can come on over to Newark and get something more affordable and that's not too far out. That's probably where I lean into. I like the idea of you know, getting something to start. But know this, if you're going to qualify for an FAH loan, which is a federally backed like mortgage, you have to be a new home buyer
within within the last three or four years. Meaning so let's just say what you could do is say the first home I can get under my name, if you can, if you're able to get a mortgage with just you, so that way you can get the because I think, faha, the down payment is only like three point five percent, which is a significant drop to the twenty percent that a regular traditional loan will require of you. And then maybe when you're ready, your husband gets the next one.
I don't know. That's my only thing is that, like, if you that I don't want that. You know, if I was going to get my first house, I would think to myself, I would like to get a house, maybe that is something with more than one unit, so I can take advantage of the fach loan and then potentially pull money out of that house to get the next one. So I'm I'm conflicted. I think home ownership is a cornerstone for wealth in the United States for
the most part. I know, we hear people say that that's not true, but the truth is when you shake the numbers out at the end oftentimes that it just is true. But at the same time, I don't want you guys to like drown yourself and be house you know, house poor.
Or yeah, yeah, I think I just keep going back to the part where she says, you know, growing up at a black household, home ownership was a big symbol of security and prosperity, and I'm disappointed that I've not achieved that milestone yet. Go easy on yourself. I mean,
you guys have achieved a lot. You have a two year old, you have two children's nine two children's two kids ages nine and twelve, and you've managed to still build this incredible nest egg, this incredible amount of money that you have for your down payment, not including your emergency fund, and you've started their you know, college savings, and it sounds like your husband's in a position to unlock even more wealth if his startup gets acquired. I know,
it's a huge if. The thing is, I think when it comes to making big personal finance decisions, at the end of the day, there's a there's a combination of the what ifs, and there's a common and there's like you have to find the happy ground between uncertainty and the information that you have now and your your personal
goals and your personal happiness. And I think at a certain point, especially buying a home is one of the most is one of the greatest examples of this and where it can all be really difficult to balance out because I don't think there's for a lot of people it is the single most expensive purchase you're ever going to make. It's always going to be fraught, and I think the more educated we get about the housing market and the ups and downs of it, there is more fear.
You know, am I making the right decision? Is it actually going to be a good investment? I think if you guys, if you look at it as you know, we have the information that we have today, we are going to look at, you know, look at the comps in our area and buy a reasonably priced home relative to the market that we're in. And we're not going to you know, we're not going to cut ourselves off at the knees financially in order to afford this home
just because we think we need it. But if you're doing it because you have children, you want to be, you know, in a good school district, you want this certain lifestyle, you want the stability that comes with home ownership, and you have the finances to pull it off and still have room to reach your other goals like retirement,
like college shavings, your emergency fund. Then I feel like you have you have enough good information, you have enough good reasons to want to own a home, and if you have the opportunity and you feel like it's a good time for you, guys, you have to just kind of make peace with that decision and the fact that you will not have all the information. There is no
crystal ball. You can make the best decision with the information you have today, and then you've got to just like let it go, let it go, and try to be mindful of how to protect yourself against certain situations. Down the line. Like Tiffany said, you know, look at you just because you have two hundred and thirty k for a downpaymentant to put all of that down, It may make you more competitive as a bar or as a buyer in your market. But you know, you don't
have to put every dollar down. You can save some to have as a slash, like an emergency fund for your for just for your home itself, or for those repairs or remodeling you might want to do. But as far as you're nervous, having nervousness around home prices will just go up and up and up and eventually become out of our reach. I think that's a real yeah, that's a real understandable fear, especially in a place like San Francisco. And I don't think that your Craig Kray
at all to start looking for homes now. It's kind of like what Tiffany said about pricing out that range Rover, like, don't talk yourself out of it until you do the legwork. You know, go see the homes. Are there even homes that you want to buy out there? Do you does it make you excited and happy to look at them? And do they give you do they help you. You said that you're really happy now your kids are in a school, a good school, and yeah, your husband has
a short commute, Like those things matter. So to get what you want in a home, what are you sacrificing any of the things that already make you? Guys so happy? And you really want to know that until you're looking that was good? Was that good?
It was great? It was endous? Even got it? No, no, no, I don'd say that was I don't even have anything to add to that, honestly, because I to your pot, I was on the fence. It's like, because the truth is, I've been thinking about that, Mandy. I'm like, Okay, I love our house here in Newark, but I'm not gonna lie. It's still new work, and so we're considering moving to
like a different neighborhood, you know, a different city. I know people are like, no, the mayor's wife is going to be like, Tiffy, what did I tell you?
You can't?
But I would still keep this house here because sis, it's paid off. We will just rent it out. But I just been struggling with like, wait, it's the market gonna drop? Should I wait? Should I not wait? Because right now it's so crazy. You know, I just been you know, doubled you know, that double Dutch entrance, like back and forth, back and forth. But you the advice
that you just gave Jennifer was really great. Like I haven't even really looked, so how do I know, you know, we might find something and we're like, oh, oh my gosh, this is really perfect. Because me and Superman have been really talking about that. They're like, you know, they're just like, this is the best part of Newark, but still Newark be Newark, and sometimes.
You still got to walk around with the taser in your pocket right exactly off the neighborhood dog for dogs or men.
So yeah, that was like so but I've been in that same spot where I'm like, okay, we've got the money. It actually is a really easy commute for Superman. You know, like we're right down the street from my sister, which is great. One of my really like my one of my closest friends was around the corner. So there's other things here that make living here so great. So I don't know, I'm on the fence, you know, because I also I'm like, oh, price is just gonna go up,
so Jennifer, I'm right with you. I'm still on the fence, but I think the best advice that Mandy gave was just start looking. You start looking, and you know, because you might find actually these neighborhoods are not that much better, or oh my gosh, I love it here and it's worth you know, it's worth not being as close.
So yeah, absolutely, you will not know until you start looking and you have the money in the bank to where if you just you can be comforted knowing when you go out there, it's not like you're going to find something that you couldn't necessarily afford. Like if you find your dream home, it sounds like you guys are in a position to go there. I would just say, you know, find a realtor who keeps you within your budget. Yeah, cause you know, you don't need to be out there
looking at things you can't have. Like the first ten minutes of the What's the Property Brothers show, where the first ten minutes they take the homeowners to the dream home and you just ask they can't afford it. It's like, why do you do this to these people?
Yeah?
Best anyway, Yeah, but you have to yes, price it out, walk in the home, see how it feels, and be open to the idea that your family's perception of home ownership is not the holy grail of finance as it may seem. And that can be okay. It can be
okay to rent. But if your dream is to have a home and you want that stability and you don't care about retiring and Portugal or wherever else, everyone retires early and never gets a home and you know, invest all their money in the market, that's not the lifestyle for you. That's fine, you do not, It's it's completely fine to just you know, be happy, have your home and reach whatever goals you guys have.
Yeah, yeah, yes, well I've grown decisions. If you've got questions, like Bianca and Jenny from the Block, you can ask them. Sis, bro, that's sounds weird. Come. We are here and available and open to you for the ba QA. We love answering your questions. When Instagram is back up, because currently right now Instagram is down. Honey, it is down. But when it is up, you could go to a Branna Vision podcast. We're at Branna Vision Podcast. You can slide into our DMS.
You can send us an email at Brandipision podcasts at gmail dot com, Hey you got it, or you can go to brannibision podcast dot com and click ask us anything and ask away. We look forward to.
It until next week. By y'all, Bye m Oka