Busting Some Credit Score Myths #491

It's but the problem is, you know, you have three girls. I have two girls, and everybody says it's so much easier to potty train girls. So I'm like really nervous about potty training a boy. Yeah, we've pulled down the little Ikea green, the green and white little Ida potty same he Westy is totally interested in it. We just haven't pulled the plug yet. But I told Kate the last package of diapers that we just got, I was like,

that is it, Like, let's commit let's do it. We're gonna cold turkey do the thing where you know, there's this whole approach. I don't want to go into take a full weeken inddicate. Yeah, like there's this approach where you just go cold turkey and you just let them go all eyes on the little dude, and basically they don't like that feeling of having just soiled themselves, and so they quickly learned like like even at night, no pull ups, nothing like that. Just like everyone poops, everyone

does have a credit score. And that's what we're talking about today, right, Yeah, but before we get to that real quick, man, I just wanted to mention it is the beginning of spring right now, basically like warmer weather and what happens when the weather gets warm The flowers are bloomin. That's true, but also the bugs come out

right and so especially in the South. Like I just had a tenant emailed me the other day and she's like, hey, by the way, I want to let you know, start to see some more bug activity at the house, which is my reminder that it's time to spray for bugs and some dl peskin role exactly. We've talked about this a few times over the years, but it's worth revisiting because Yeah, I wrote an article up on our site at how the Money dot Com just telling people how

to do it themselves. And it's amazing how much money you can save because a lot of our listeners are probably paying something like a hundred dollars a quarter to a pest control company to come for a quarterly spraying. So let's say you're you're spending four dollars a year to combat bugs to keep them out of your house. Well, you can d I Y it and literally you will shell out no, no more than and actually less than a hundred dollars uh and in the beginning, and that

supply the sprayer and the chemicals. And this is not the chemical that you can buy at home debo by the way, this is the chemicals that the pros use. You can get both for for like, you know, roughly in the range of seventy bucks. Yeah, and you're not just buying like a little spray bottle to like you know, like, this is professional grade stuff. And we we crunched the numbers on it too. And literally once after you get that, you're only using something like two dollars worth of chemicals

over the course of a year. And so you're looking at u versus two dollars a year after that upfront cost, and it's easy to see that you are quickly going to be able to come out ahead. And I think most people might hear that and they're like, well, there's gotta be a catch, right, like, uh, something's in fear in this process, or you know what, I don't think I'm gonna know be able to know how to do this.

And unfortunately, there are instructional videos on you know, some of these websites where they will show you how to do it properly and really honestly if any dummy can do it, so it's it's not something that takes special skills or anything like that. And and just considering how much money you can save you in one fell swoop, Um, we're all kind of faced with higher rates of inflation,

higher costs on almost everything. He's right now, if you're looking to save money in a big way, and just like one fell swoop, this is definitely one thing to look at. Absolutely. And something else I gotta tell listeners about. Have we have we talked about about my bug assault gun on the show before you know talk about the one that blows their No, it's this one that shoots salt. Oh, that's right, that's right, that's right. That's right. So I got this for Christmas and it is the coolest thing.

It's a little so basically it's like a little pump shotgun, but it's a it's made of plastic. It's a toy, and it's got a little canister and you pour table salt in there, like like a tablespoon or two tablespoon's worth of literally table salt. You close it up, you pump it, and when you shoot it, it literally shoots out like a little blast of a little bit of salt, kind of like a shotgun pellet. It's it's literally a

shotgun for bugs that shoots salt. And so this is the most fun I have ever had taken down little house flies in my house. I will link to it uh in our show notes because literally it is so fun. It's it's way more fun than than the old bugs apper down the South Georgia, which very few people are aware of what I'm talking about here, But aside from the d ips control, if you want to get yourself a bug of salt gun, I highly recommend it. I mean, it does sound like fun. I might have to get one, dude,

just for the sheer joy. Next time you all are over and there's a little house fly or a nat or something like that, let me take it. I'll let you have a shot with it, because it is a ton of fun. Good. I appreciate that it's just salt, and so you miss, or even if you don't miss, you know, you pick up the five. But then like all the salt just kind of disperses a little bit. But it's salt. It's like, it's not that big of a deal. If there's a little bit of salt on

the ground. Next time you're sweet or your vacuum, you get it up off the floor and you barely notice it and tell them I bet exactly. Um. Nice, Okay, Well, word to the wise, do your own pest control, save you some some some money, and bug a salt gun. All right, and let's move on. Let's mention the beer that we're having on the show. This one is called Hello World, and it's by Spyglass Brewing, and this one will sent to us by listener Gary. He sent us

Monday's beer. Looking forward to having this one today, And we'll give our thoughts at the end of the episode, but for now, Matt, looking onto the subject at hand, we are of course tackling some credit score, miss we're busting them up. And you know, it made me think, like there are all sorts of myths that have grown into legends over the years, over decades. The lock this monster is one of those, right, Paul bunyan UFOs, Like did they exist? Don't they? All sorts of of these

like they're they're just drones. You know, all of these things have developed outsized tales that make for interesting TV shows, and they're fun to talk about maybe on a Friday night over a nice craft beer with some of your friends, just kind of well, I don't know, is it real

or isn't it? And the same as maybe like the legend with the moon landing being fake, although I don't know, that's just kind of less fun to talk about, and uh, not so small contingent of Americans they continue to believe in the existence of like a sasquatch like creature roaming the woods. But yeah, some have lashed onto these tales.

They've they've taken them as factual. And you know, while I don't have definitive proof that Bigfoot doesn't exist, it certainly doesn't match up with what my eyes have seen firsthand. And part of the reason these myths persist is because there isn't documented evidence to the contrary, right, I mean, but credit score myths, on the other hand, well, they continue to exist despite hard evidence of their inaccuracies. And

so that's why we're talking about this today. I mean, these these myths impact your finances in a real and ongoing way. So we've got a scuss some in a way that maybe your bigfoot obsession doesn't impact your day to day life, it's right, man, so and if it does, you've got a real problem. It's time to bust these myths up. And part of the reason too, that we're tackling this topic now is because of the fact that March it's National Credit Education Month. But you didn't know that.

There's a there everything everything these days. But there are also a lot of misconceptions and miss understandings out there about credit scores and these myths. They lead folks to take just different past like incorrect paths towards their credit. It often impacts their score negatively, causing actual real side effects. And we want you to have a great credit score

because it has such a wide ranging impact. Living without a credit score would be tough in a modern society, and like, is that a good thing that we have to function with the credit score? Not necessarily. We're not huge fans of the credit bureaus and you know, specifically their inability to keep our personal data secure. But it's kind of like we've been put down in a game

that we just can't stop playing. I mean could stop playing, but you would have to need a pile of cash in order to truly avoid the credit score system altogether, in order to completely skirt it. Yeah, it's kind of like even if you want to be an entrepreneur at age twelve, like, you still got to finish high school. I mean it's it's it's part of the process and you'll have to your your parents are gonna get in

big trouble if you don't write. I mean it's um, is there some law like do you actually have to finish high school? No, I think you're gonna get in big trouble if you drop out before before the age

of sixteen. I didn't know that. Yeah, I think I don't know what the actual roles are, but I'm pretty sure you gotta go to school, and the kids are listening to school, I mean you should, like I agree that that's probably it's probably a good, healthy approach to becoming a fully formed Adult'm pretty sure the state can come after the parents if if the kids come out, Yeah, if they take them out of school and there's no sign that they're doing any sort of homeschooling. What kind

of country we're living in. I don't know. We might disagree on whether or not that's a reasonable thing, but it's reasonable. But I feel like people should have a choice. Whatever. Let's go, let's don't take your kids out of school.

They mean, I'm not they will say it school because they're gonna go to college most likely to what other people to have the choice if they choose not to, if they choose to rip their kids out of school and just you know, send them down the Jeff Bezos path, Um, yeah, gens kid and they're able to take whatever remedial course or class where they're basically able to get the equivalent of a high school diploma. Of course they should be able to do that, right, Okay, al right, well, let's

let's move on. Let's talk about what a good score is because that kind of sets up this question of like, well, what are we aiming to achieve here with with our credit score. And you know, Matt, you just mentioned one way to avoid the system would be to have just a ton of money. You're loaded, right, Like, you don't need a lender to approve you to buy a home if you've got five million bucks in the bank, and

you can go buy any home that you desire. But since most folks don't have that, most folks don't have that much money on hand, especially these days, like to buy home, which it gets really expensive. In a car, same thing, right, cars are not cheap, so paying attention to your credit score is a mo But then the

question is like what is a good score? And I guess you know, we have to tackle that because um, and it's actually kind of a difficult question to answer because there are different scales, like kind of like how we're talking about schools here, how some schools might have an A scale an eight eight could be considered an A, I guess in some schools or ninety I remember in high school when migrating scale changed and it used to be a ninety two and up wasn't a and then

they changed to a ninety Enough was an A Seriously, yeah, in the middle of high school and so weird. A couple of my my above bees are obviously a D C S or no, it's it depends on the school system. And so I distinctly remember, like two of my bees became a's all of a sudden, My g p A

got a little bit higher. And so similarly with credit scores, some of these bureaus have just a different threshold for what's considered good or great and so yeah, so the score that your lender sees when you're refinancing an auto loan, let's say, it can differ from the one you get if you were to get that scored directly from the beer row. And each bureau also has quite a few credit scores for you behind the scenes, so it's it's not even different models. Yeah, like there's this one score

that you have for each bureau. It's like they might have a dozen scores for you based on different factors. And so the score your lender sees when you're refinancing an auto loan, let's say, can differ from the one that you get if you were to get that score directly from the bureau. And you know, most of these scores are on a scale that goes up to like eight fifty or nine hundred, and some folks are striving for a perfect credit score under each one of these models,

and that's just a recipe for in futility. Um, it's it's just completely unnecessary to strive for perfection. Basically, if your score is in the seven forty plus range on any of these scales, that's good enough and it will basically qualify you for the best terms for different loans you might need access to. Just remember that seven forty or above is basically that a range where you're gonna want to be in order to, yeah, get the best terms on all sorts of different lending products until they

changed the rules on you. All right, let's go ahead and get started busting up some of these credit score myths. By the way, you remember the guys from MythBusters back in the day, Like, that's one of the inspiration, you know, for the title of this episode for the listeners out there. That was one of those first hit reality styles SIGN and CE TV shows. Yeah, one of my favorite ones

I remember was they're like blasting cannonballs into a wall. Um. And interestingly, this was like one of the episodes where they screwed up and like they're out out in the desert, like at a firing range or like like a bomb range basically, and like the cannon like tipped up and so the cannonball missed the wall and it went ricocheting off of like one of the hills and into a neighborhood. Gosh, yeah, super crazy. Uh, nobody got hurt, but like I do

remember like crashing into some some dude's house. I think it like went through a van, pretty serious, Like, and that's the day MythBusters got canceled. No, they did. Like that was right in the middle of a run of seasons where they were crushing. It probably made for good TV ratings, I think it did. Like that's the one I remember was the one where there was an errant cannon all. I could not imagine seeing that in real life. Anyway,

let's do some mythbusting of our own. Uh. And the first one we wanted to share is that your credit score doesn't really matter all that much. And there's a good reason that we're starting with this one because we want to highlight the fact that your credit score is incredibly important. It affects so much more of your life than you realize. We just talked about the need for a credit score and modern society, but everything is going

to cost you more if your credit score stinks. Lenders they're gonna charge you what's called a risk premium if your score isn't great, But they also might decide not to lend to you at all if your score is in the dumps, and you might see to yourself, all right, that's fine, I'm not gonna ever own a home. That's fine. Your credit score comes in play when you're renting a house to land lords. They're gonna almost always run a credit check, and that is going to impact your ability

to get the place that you want. You know, if I'm choosing between two tenants, they both seem great, they both make the same amount of money. I've got to base my decision on something, and the credit score can often tip the scales. A bad or non existing credit score could also impact your ability to get home, internet or cable, or it might require you to put down a deposit. You might even pay more for auto insurance if your score is low. Having a good, solid credit

score is not a trivial thing. Yeah, your credit score has an impact in so many areas of your life, and not only will a crappy credit score impact your ability to spend money, to take out a loan, for to take on debt for something that you're looking to buy, which, let's be honest, maybe this is actually a blessing in disguise. Um, if you potentially keep you from spending more money, yeah, then you can afford to well. It can also hamper

your ability to earn money. And yeah, your credit history can have an impact when you apply for some jobs, like in particular ones in finance, or let's say you're moving up to management level, then um, there's a good chance your credit score comes into play here. Credit checks happen more often for these types of jobs where the stakes are higher, like when a security clearance is involved, or if you have access to a lot of money

or sensitive information of your coworkers. I don't know this for a fact, but I got a feel in that, like bank tellers, if you've got a really really really crappy credit scored, like maybe you don't get that bank teller job where you're you know, doing up the hundred. Yeah, they might be like, sorry, go apply down the street

at target. Um, and so yeah, you know. One study shows that of HR managers are actually gonna check your credit history during the hiring process, even though they won't be able to see your actual score in most cases. But here's the deal. Your score is influenced by what's on your credit report. So if they can take a look at your credit report, they kind of, in theory,

can deduce what your score is. And that crummy credit report with lots of errors and issues on it is going to potentially affect your ability to get the job that you want. That's right. All right, We've got more credit myths that need to be shelat and we'll get to all of those right after this break. All right, we're back and we are busting up some of those different credit score myths that may have heard of, some

you may not have heard of before. Um let's get to our next one, which is checking your credit score hurts your credit score. I feel like this is one that's been around for a long time, and you know, like years ago, the credit scords were kind of like shrouded in secrecy. Like the bureaus and the banks and the lenders they knew what our credit score was, but

we didn't. Sort of like credit scores, we're kind of like fight club, right, like the first rule of Credit score club is to not talk about your credit score, you know, where you're fearing that just like an utterance might punish your score where you would you know, see a drop significantly. Yeah, it's like almost like the thought

police would come after you. Like I thought about my credit score and I kind of wondered what what my point score was total was And it's like, no, if if you can ask that question your brain, they're gonna take your score down a notch or two. It's almost like you're just better off just hoping for the best. But luckily that's that's no longer the case. We all have access to our our scores pretty much at every

turn these days. But I truly remember when that wasn't the case, because I distinctly remember one of the first credit cards I ever got was at a bank that no longer exists called Washington Mutual that went it went down, uh, you know, the great recession of the late to early two thousands there two eight And basically it was one of the first credit cards that made your credit score

known to you on a monthly basis. They basically started the revolution, uh, making credit scores widely accessive discover um No. I think they came shortly after, and they've done a great job doing that. But WAMU was kind of that first bank where it was like listen, no annual fee credit card, but you get to know your credit score every month. And so for you know, money nerds like me who wanted to, Yeah, I wanted to, and there was no other place on the internet where where I

don't think this was before credit carma existed. This is before the internet, not quite, but this is before electricity. I know I'm definitely aging myself here, but it was kind of nice to have a credit score that would make that known to you. And and you know, since then, obviously it's gotten so much easier to stay on top.

And we'll talk about that a little bit later, but I remember in those days where it was like herring to find out what your credit score was, and you like either had to find that one brandom credit card that would do it or just kind of hope and pray when you apply for a loan that your credit was in decent shape, where you just had to know somebody on the inside. But it is important to know that there's a difference between a soft pull and your

credit and a hard one. Hard polls will hurt your score, but soft ones won't. And so if you're getting a mortgage on a car loan, the lender is gonna run your your credit and that's considered a hard inquiry. That hard poll will ding your score just a little bit, maybe like ten points. Unfortunately, like that's just the price of admission though after all, the you know, the credit beers, they don't want to see you applying for new lines

of credit every chance that you get. Um. But on that note, some folks have come to believe that shopping around four a loan is going to hurt your score, and you know that's true, uh, that you will see an initial hit to your score, but that doesn't mean that if you shop with multiple lenders that it will send your score sinking even lower with every single time

that you get a quote. The beer have it set up to where if you make multiple inquiries inside of a specific time window, uh, and typically that's two weeks, those like three or four or five credit poles, they're just going to count as a single pole. So don't freak out, like we still want you to get multiple quotes, because it's definitely the best way for you to get the lowest rate, but doing that within a timely manner, that's really important. Uh, and it's good for you to

know that that will not hurt your credit score. Yeah, and that two week window is kind of the typical parameter used by some of the older credit scoring models. According to credit Karma, the newer scoring models that they treat multiple inquiries as a single pole as long as you make them, and they offer a much larger window of like forty five days, which is great, there's plenty

of time to shot. But unfortunately as the end user, because some things are still shrouded in secrecy in the credit score credit report arena, Um, you don't know what scoring model the lender you're getting quotes from is using, so you don't know if they're going new school or old school, and so it's like are you using the vantage seven points six? And they're gonna look at you like, wait, what are you are using the five nine point one? Like which which model are you using? And yeah, like

go back to Lamoo Jewel out of here. I'll be like I can't. They don't exist anymore. Um. But yeah, basically it's best to stick with the fourteen day window to be on the safe side. Just keep that as your rule of thumb when you're getting let's say, quotes for you know, a mortgage through a lender. Um, make sure you get all those quotes in that fourteen days

and you'll be fine. But on the other side of the spectrum, you're checking your own score via your credit card company or through a site like credit Carma, isn't gonna have any impact on your score because that is

what's known as a soft ball. It's different. And so yeah, you can check every single day if you want to, although that sounds like overkill and you might be a little bit too obsessed, But yeah, I think some people have that misunderstanding Matt, that it's like, if I want to know what my credit score is, I'm gonna to pay the price and it's gonna hurt my credit score. And that is just not the case. You can check your credit score a whole lot and it's not going

to mess with you. It's only when those lenders are doing a hard pool in order to determine whether you have a level of credit worthiness where you can get that loan or not, that is when it's gonna ding your score just a little bit. That is right next credit score. Myth having debt will hurt your credit score. And what's really interesting about this one is that the

opposite of this is kind of true. Some folks like they don't even call it a credit score, they call it like a debt score, which is actually it's slightly more accurate, even though it's kind of been used as a pejorative at times. But your score actually goes up if you have a variety of different loans and credit cards. Uh,

as long as you're handling them all well. It pays to have a variety of debt, namely revolving debt, So that's like a credit card where you borrow money, you pay it back, and then you can borrow it again, and then installment in debt like a mortgage, where you borrow that larger lump sum and then you slowly make payments on that over a longer period of time. So if you've just got say one credit card, but you don't have a student loan, you don't have a mortgage.

Even if you pay on time and in full every month, your score is not gonna be able to go as high as someone who has a greater variety of debt. Yeah, but at the same time, you shouldn't necessarily go back and take out student loans for a degree you don't need and just to improve your credit score. That would be the wrong waiting. Yes. On that note, By the way, paying off one of your debts can actually hurt your

credit score, which is just kind of interesting. Um. Let's say you've had a car loan for a few years and you finally make that last payment and you are so pumped, right, You're like, I no longer have to pay money towards this car. I own it free and clear, and what a beautiful feeling that is. And I promised Matt Joel that I will never take out a car loan again, exactly, which we expect that in writing into

our email inbox. But you know, the the one downside to that, and I don't want to make it sound like it's a huge downside, but your credit score might take like a tend to twenty point hit in the aftermath of that loan no longer being on your credit report. It can negatively impact your score. And it sounds crazy, but it is actually true. And fortunately that ding typically it doesn't last all that long and This is definitely and not a reason to keep debt lingering around in

your life past the point that you need to. Just like having a student loan might actually help your credit score a little bit, like you don't want to go get one just because it's going to help your credit score. Well, just because paying off that car loan could negatively impact your score for a small period of time doesn't mean

you don't want to pay it off. But it is smart to be aware because you know, especially if you need to use that tip top credit score to get a loan for a big future purchase in the near future, you want to be careful about the timing of when you pay off one of those big loans, because, yeah, if you're at seven fifty, you pay that car loan off your seven thirty and you're applying for a mortgage loan, that could impact, yeah, the rate that you get on

something you're gonna be paying on for thirty years, which sounds unlikely, I think maybe to a lot of folks as they're sitting there, but like, no, that that's kind of how money works, right. You get a big bonus at work and you're like, you know what, I'm gonna go ahead and pay off my car loan a little bit early. I've got six months left. Let's go ahead and uh that out completely. And we've got enough money now to put a down payment on the house. Like

we're crushing it. And then you find out that, oh, I'm sorry, so you don't qualify for the top tier really off a really nice rate, or I'm sorry, ma'am, you actually are going to owe a little bit more on the fees associated with your loan. It's just something to keep in mind. Just like Joel said, Uh, it actually has a higher chance of happening than you think. And so another credit score myth that we wanted to mention,

carrying a balance will help boost my score. This one is sort of like the flip side of the coin from what we were just touching on, and a lot of folks have bought it into this myth. You know, they're thinking, having a nice mix of debt that's helping out your score. Uh so maybe not paying your credit card balance off I should do the same thing, right,

It's like keeping that debt around score, that's dumb. No, your monthly statement balance it still gets reported to the credit bureau, but that doesn't mean that you should carry a balance and pay interest to the credit card companies instead. There's no need to neglect to pay it off. It's not gonna help you. It's only gonna cost you money in interest. Yeah, but people just assume, well, let me, like,

let that balance linger. I'll pay a little bit of interest, but it's going to help my credit score, and that's just not true. I think it's just oftentimes to just folks just fooling themselves, right because like maybe like deep down you know that that's probably not true, but you think, no, you know, like there's a chance maybe that might be the case, but no, like do what you need to

do to make sure that you're paying your bills. This is definitely one that people like to trick themselves on, or at least they get tricked by they assume that, yeah, if I just don't pay it off in full, I might pay a little interest, but it's going to raise my score and so it's all gonna wash out in the end. I need to work on my credit score, and so this is a way to do it, but in reality it has no bearing and actually it just hurts your personal finances if you do that, all, right,

Next credit score. Myth we we need to bust Matt. Is your banking affects your credit score. Well, that's definitely not true, right because, uh, yeah, how much money you have in checkings or savings, it doesn't have any impacts whatsoever on your credit score. Doesn't matter if you have two grand in your savings account, like, that doesn't matter

to the credit score people. They don't look at that, they don't care, right, So yeah, it's it's very possible to have a great caredit score but be completely broke with nothing in the bank even. Um, However, that doesn't mean right that cash on hand doesn't matter, and lenders will look at your total assets to determine if they're going to approve you for any new credit, but it doesn't have any bearing on your credit score. Right. The amount of money that you have just chilling. And so

it doesn't matter where you do banking either, right. Some people assume that the bank they do business with is reporting low account balances or or lets the credit bureau know about an overdraft fee that gets incurred, and that's just not true. Um, that that stuff doesn't matter, doesn't factor into your credit score, and it's not getting reported

in any way to the credit bureaus. So just know that, Yeah, the way you do banking, who you bank with, and some of those minor infractions that you might run a foul of, they're not going to impact your score in any way. Yeah, the credit bureaus, they don't care what you do with your money. Like, it's not about your money. It's it's about other people's money, right, It's about the money that you've borrowed and whether or not you're paying

that back, how you're handling that money. They don't care what you do with your money exactly. That's up to you. That's you in your business, Like are you a good borrower? Not are you a good saber? Exactly. Yeah, another myth we wanted to get to. There's this one where you should hire someone to help fix your banged up credit score. We completely disagree with this one. There's nothing that someone on the internet claiming to help your score can do

that you can't do for yourself. There's so many bold, onecious claims on the internet. To Matt, yeah, well you got to ignore all the post of all those false headlines. Uh, it's this is just a waste of money. Though, and oftentimes it's an all out con or a scam. Oftentimes they're gonna try to charge you an upfront fee and then they end up not being able to deliver on the promises, which often includes claiming to be able to remove that negative information from your credit report even if

that information is accurate. They cannot do that. That is not true. So avoid anyone who says that they'll fix your score if you just pay them some money. And I think this is another just too good to be true sort of thing right where people are like, oh, yes, if I don't pay my credit card balance, my score will magically go up. Or wait, if I pay this person, um, you know, five bucks, a thousand bucks, my problem of a crummy credit score will quickly dissipate. It's going to

be gone. But it's just like a rich quick scheme. Like the promises sound appealing, and when you're in that mind, you want things to get fixed quickly and you want things to be easy. Yes, but in reality that's not how it works. And basically you're always swindled out of your money because there is no way to just change your credit score overnight. Yeah, that's right, just like you can't just take a pill and magically get fit like it takes hard work, it takes discipline, and really wish

you could though personal responsibility. But we'll talk more about how to raise your your credit score and how you can do it without anyone else's help, and we'll get to all of that right after this break. All right, man, we we got to talk about how people can heal their own credit scores without paying big bucks to scam artists on the internet. We'll get to that in just

a second. I wanted to cover just one more credit score myth, and maybe it isn't even a myth anymore, but you know, a question we've been asked on the show multiple times has to do with the impact on your credit score by closing a credit card that you're

not using. This is something that there's still just a ton of confusion in that arena over and this is important to cover because your credit score, it's composed of a number of factors, and really we should we should talk about that because you might be hurting yourself on two of the main fronts if you cancel an older card. So some people I get the impulse they want to cancel a card because they just paid off and then balance their credit card debt free, and what they want

to do is get it out of their life. And maybe they're like Marie condoing their life and they're just I want just to simplify, simplifying, and that we're cleaning house, close, close clothes. And then they find this away. Through this away, their credit score takes a beating, right, And that's because, first of all, the age of your credit matters. Um So the longer you've had the card, the more it's helping your score. And yeah, if you cancel it, that's

gonna that's gonna impact you negatively. Also, credit utilization is an important term that you've got to be familiar with. Basically, the bureaus want you to have a lot of available credit but to be using very very little of it. Basically it shows restraint, which makes you look like a better borrow. Or it's like, oh, look at look at Jack over there, or look at Jill over there. It's like they have just so much credit access but they used so very little of it. They must be a

stute borrower who doesn't get in over their head. So yeah, instead of canceling a card, we would suggest keeping it open even once it's paid off in full, which is what we suggest, Like, we don't want you to have any credit card debt ever, but um yeah, use it every couple of months, continue to pay it off on in full and on time, and that card is going to keep helping you out, even if you found maybe

better rewards and parks with another card. Or you're like, listen, I'm just add a credit card debt altogether, and I don't even want to be bothered by by this thing anymore. Still, you can still cut it up, or you can still stick it in the freezer, whatever you need to do. But what you don't want to do is call the credit card company and cancel that card altogether. That's right. And you mentioned to using a card like maybe every couple of months to kind of keep that line active.

I'll mention that I've got at least three cards that I never used. They are cards that I have laid to rest, so to speak. Uh, and I only use them one like literally I think once a year now, and that at least in my case. You know, your mileage may vary, uh, But in my case, I've been able to keep those accounts open by literally only using those cards once a year, uh. And that is a

City card, a Discover card, and a Capital One card. Uh. And so it may not even take you using it every couple of months, but it also too, I mean, it kind of depends on how many lines of credit you have, right So, if you've got I don't know, I mean, if you've got twelve credit cards, if there's one that you just really want to get rid of, maybe specifically if it has especially if it has an annual fee and you're not getting any value from that card,

that account would be a great candidate to close. First of all, you've got multiple lines of credit already, and so it's not like you're going to be significantly reducing your card utilization. But again, the fact that you're paying potentially ninety five bucks a year, whatever the annual fee is, you need to make sure that you're actually getting that value from that card if you're going to be paying

that exactly. I think that is one of the only reasons I think I have an article up on the site about when and how you should go about canceling a credit card. It's we'll put that in the show notes.

But I think, Matt, the one other thing you could do if you have a credit card with an annual fee, is you can call your credit card company up and say, hey, can you actually transfer me to another credit card that has no annual fee with the same the same issuer, and often times a will to do that, and so it retains that credit history. Um, but you still get rid of that annual fee. That's kind of pesky. Exactly. Yeah, they're happy that you haven't completely lost your allegiance to

them as a company. Uh. And you are happy because you're not having to fork over that money for no value in return. And so you know, we also want to make sure that you don't feel the need to obsess over your credit scored. You touched on this earlier, Joel, but like it's it's an important part of your personal finances. It's worth keeping tabs on. But it is possible to

be too attentive to your credit score. Uh. And so we want you, if this is you, we want you to limit your the amount of time that you're giving it, Like maybe just check it once a quarter in order to know you know that what your score is looking like. You can even just set a calendar reminder for yourself. Uh. It is important because it dinged credit score can tip you off to something that you might not be aware of that might have been added to your credit report,

maybe even by mistake. Discovers credit scorecard credit Karma they're two of our favorite sites for checking your credit. They'll even give you a peek under the hood of your credit score to see what might be causing the problem uh and you'll find some helpful education tools there as well. And studies have shown that just knowing your score is an important step towards improving it, so that awareness it goes a long way towards doing the work to make

it better. But we don't want it to be something that you're checking every single morning, like before you check your email, Like it doesn't need to be a part of your routine. Yes, no, completely agree. I think that the diagnostic feature though of those websites is really helpful because if you're saying, Okay, I see what my credit score is, it's not in the best spot. I really want to raise it to that seven forty plus level that Matt and Joel we're talking about. How do I

get there? Well, you'll see the areas that are holding you back, and it might be length of credit history that might be one of the biggest things, or it might be on time payments, which if you've had a few of those, those are going to hurt your credit score in a big way. Those will over time fall off.

But there are all these little things that you can see as you're looking at that that diagnostic toolkit on those sites where where you can know where to focus your efforts on how to make your credit score better. And I think, um, yeah, you're not. Don't pay anybody money right to do something that they can't actually do. But when you look at that and you figure out what's holding you back, then you can address it with how you handle your credit in the future totally. And

here's the thing. If you do check your credit score and you find out that it's taken a hit, well, then make sure to pull your credit report from the site Annual Credit report dot com. And I kind of alluded to this earlier math that the credit report and the score are two different things. The report kind of list out all the things that are happening with your credit and the score gives you like a numerical reading of what you're you know, what's basically on that report.

And so if there are any errors you're gonna want to make sure to file a dispute directly with the with the credit bureau where that issue lies. And so yeah, something like one in four credit reports contains an error. So there's no need to stress if your report has something fishy on it. It's not like you are an anomaly. Um. A lot of people have have this issue. Sadly. Um, the bureaus they don't do an amazing job at responding to those disputes. Their track record has only gotten worse

over the past couple of years. And yeah, here we would say that's not right. Um, the credit bureaus need to do a better job. And it is borderline infuriating that they have the powers that they have to amass all the data on us that they do and then to package and sell our credit scores um without actually having to verify that the information is accurate. But here's

the thing. You've got to be the squeaky wheel in order to get that error fixed, because the credit bureaus they're big, behemous, and yeah, you've got to be like that little David beating up a goliath in order to get um change actually to happen to make sure your credit score reflects accurately the truth about what's happening with

your credit. That's right. And by the way, real quick annual credit report dot Com you can still go there, Like they should call it weekly credit report dot com because like it was the middle of the pandemic when they switched to you being able to get all three reports for free every single week. Um, but I hope that becomes normal forever. Well, things haven't changed yet, but it's said to go back in the middle of April to reset, and so those free weekly reports are running out.

So if if that's something you haven't done yet, now would be a great time to go ahead and get get in there and get all three before the usual rules come back to play. But but like you're s angel, like, we're not big fans of the credit report the scoring system as it stands, largely because of the propensity for the errors that you're just talking about and the reality that the credit bureaus like they could or less about the errors themselves or helping you to resolve them, because again,

you are not the customer. Uh, they are selling your data to their actual customers. You are the data. But those errors they can prevent. Folks, from getting loans, you know, even sometimes getting jobs. But credit scores are a reality that we all have to deal with. Um. Not paying attention to your credit score or pretending that it doesn't exist, that's going to eventually have a negative impact on your life.

You're not gonna be able to qualify for a home loan that you really want, or you know, maybe you won't qualify for the best interest rate at least uh, increasing the monthly cost of that mortgage. You can hate the game, but it is still smart to play it. Like, even when the rules of the game are changing, like even by now pay later, that is starting to become something that is getting incorporated into credit scores. It's something

that we all need to be aware of. We need to know how to play the games, even if we're not the biggest fan of the game. Yeah, so let's give a few final tips, just kind of maybe to sum it up. Yeah, like, well, how are just a few ways if we were going to give you just three or four suggestions on how to improve your credit score the most quickly, right, what were your big takeaways with the effort? Right? Um, I would say that kind

of thing. One thing, of course, is to pay your bills on time, right, Um, and the if you don't do that, that is going to doing your credit more than anything else. Um, Late pays or not paying are going to be the worst reflection on you as a borrower, and they're gonna crush your score. And a single missed payment, Matt can lop a hundred points off of somebody's credit score. Um, So yeah, use that smartly pay off your debts as you've agreed to. Basically, you don't want to get in

over your head. Don't kid yourself into thinking that taking on a big car loan is is smart just because it's gonna give your score a bump. Um, that's that's a bad move. Intelligently using a few different credit cards each month to pay for your needs and then paying those balances in full is helpful and then don't close those accounts. So, yeah, you want access to these varied kinds of credit, but only credit that you can handle, only credit that you can use wisely. And yeah, credit

cards are a portion of those. Using them intelligently is going to help your score. Having seasoned credit in your possession is a good thing to write. Like we said, the longer you've had some of those credit products around in your life, especially some of those credit cards that you've had for a decade plus. It's like, you don't want to get rid of that because that is having

a helpful impact on your credit score. And and and then Matt for for somebody out there who says, I've got a really bad score and you know, I can't even get a credit card right now, Well, um, if your credit score is in really poor shape, we would recommend a site like self dot ink, and that's our favorite place for people to turn. They have these credit builder accounts and they're a great way to quickly build up your score through a credit builder a loan. So

that's one of the first things we would recommend. That's one of the best places to go to be able to quickly start jump starting your score. Um. But yeah, I think we actually did an episode specifically for people who have a rough or or busted up. It's right so one thirteen. If you want to dig back into the archives and listen to that one, Okay, yeah, we'll

link that in the show notes as well. But yeah, there are different tactics that you're gonna want to take if your credit score is already just completely in the dumps um. But again, this is one of those things that you can do and you do not need the help of some faux internet professional um to get you to where you need to be. That's right. And by the way, if you have kids and you want them to reach adulthood and have a great credit score, it's actually pretty easy to get them started off on the

right foot. One of the best ways to accomplish this is to make them an authorized user on one of your credit card accounts, but not give them an actual card. And that's the trick. You don't want your eight year old, I guess, running around with a credit card. But this assumes that you have and you continue to have and maintain good credit. But the credit bureaus, they're gonna see your child with access to that good credit you know themselves,

and it will, by association, inflate their credit worthiness. It's a nice little, nice little tit nice little hack. We've talked about this maybe on the show. Was like a year ago, maybe year and a half ago, and I haven't checked my kids credit. But at that point in time, I added my kids to one of my cards. They're still on that card. I still use that card. And pay it off on time in full. Uh so, I'm

guessing they've got pretty stellar credit. I think they say their prayers every night, like please Lord, lid Daddy pay his credit card building well so he doesn't hurt my credit. Now, But now you're right, like that is one of those things that you can do for your kids, and it can be really helpful for it's it's like a nice little service UNI starting them off on the right foot

a little bit of credit. Yeah. Um, all right, I want to ask you one one question here at the end, because I think, um, right now, credit scores still matter a great deal in our society, right and it's one of the things that we're saying that you kind of can't get around. You have to pay attention to it. It's part of the game, the personal finance game that we all play, and so you just have to be

ready to suit up and do your best. But um, yeah, do you think that credit scores in their current iteration are think okay, like you're diving into the fiction now, Yeah, the possibilities I only deal in fact, ten years in the future, will credit scores play as big of an impact in our personal finance lives as they do today, I mean they do now. I think as different apps come online, like basically all I feel like all the different UH finance apps are in an arms race right

to get as many customers as possible. Whether that's initially UH an app that allows you to transfer money to your friends very easily because they have that app as well, and then all of a sudden, guess what, Oh, you can buy a bitcoin with that app. So you all of a sudden, now you can transfer money, you can

save in that app, and you can also quote unquote invest. UH. The next thing that a lot of these apps and you know, money management platforms I think are allowing their customers to do is then borrow money, which guess what if they know all of your transactions and they have your history, I could see them not necessarily needing to go to the credit bureers and get an actual credit report or credit score from them. Uh. So it depends, I guess, on what the future of the different finance

apps look like. That is one path forward, but I'm not going to say that that's where we're going. I'm just kind of I'm laying out the future like this could happen, or this could happen. I'm not going to necessarily say that that will happen, but do you disagree like you seem less optimistic about the future of credit score People are so fed up and frustrated with the credit bureaus. Something's going to give at some point, and I think we've already seen alternative They fed up? Or

do people just not care? Right Like, like when there's a data breach and fifty million people have have there's a security just floating around out there in the dark, hundred fifty Like people don't care. Were they still have the same passwords that they've used for five years? Uh? You included I know some of your passwords, and I'm always like, I'm pretty sure I can guess you know, I'm trying to break in my accounts? Well your new

Netflix passwords? Okay, Well, I'll say this. I think that that you know, they get the highest complaints of when it comes to scam attempts, that is when it comes shut down. And I think that some folks in the in the government have already floated the idea that maybe, um, a centralized control of credit scores can take place, some sort of government run system. I don't know if that would be better because the somewhat not really privatized system

we have right now isn't working very well either. Um but I could see just companies making decisions based on some of your other public profiles, um so how you act on social media and maybe oh my gosh it, I know, but I think it's already happening to a certain extent. I'm curious to see what happens over the

next ten years. But it's interesting. So you see it maybe going towards a more centralized, you know, mechanism, either more centralized or completely decentral I see it being more decentralized with these independent different companies who are setting up shops with either within an app or just with it within a site, but I think more likely and they start to communicate to each other when they need like some respective information to kind of fill out all the

dots on. I could see that an application that you've that you've submitted that definitely feels less big brother, you know, I mean, come on, the future is on the blockchain anyway, So like that's less direction we're going. But that's gonna be it for credit scores, dude. Let's talk about this beer for this episode. This was Hello World by Eyeglass Brewing Company. Uh, sent to us by Gary. What were

your thoughts on this beer? All right? So I think this was maybe even a touch better than Monday's beer. Really it's hard to say that, but I thought you're gonna say that this one wasn't as good because I thought this one was a touch sweeter. Okay, it was a little bit sweeter. It was like a little more juicy, a little more yeah, Like I don't know, just juicy is the I think you're up in my head, but I don't know. Man. I really enjoyed both these beers.

They were both really really different examples of hazy I p A s having different hot profiles. It is just amazing the way that different hot varieties mixed together can create just a completely different profile. And it always surprises me where I'm like, wait, no fruits used in this or wait a second, it's just like two different hops and that completely changed like the flavor profile. But hops are just so um versatile, and so this beer just kind of showcased a different kind of hop that had

a distinctly different flavor profile. But Gary just sending us some slammer beers this week. Man. Yeah. Absolutely, which, by the way, so you're saying, oh, there's no fruit in this beer makes takes me back to one of the beers that we said that on, which was Woodland Pursuit. That was a Humble Forger beer, And it turns out I did look it up and in fact, it did have fruit in it on the can. They don't want to advertise it. Yeah, on the can, it didn't say

anything about fruit anywhere on the can. But when you go and go to the website or you know, go to the brewery, it actually was a fruited I believe it was a fruited I PA because that one was Woodland Pursuit. It was crazy off the chain fruit and you and I were just like racking our brains. Were they able to pull that kind of fruit flavor out of this beer without any actual fruit and only with the hops. I don't think that's what's going on here.

This This tastes like a classic hazy double I p A and I wanted to point out to the label for this one. I love it's uh black background green ms DOS print. It reminds me a lot of one of our favorite local brewis here. Halfway Crooks where they're kind of going with like that. I don't know what do you call it, like nerd sheep or something like that, but Halfway Crooks they've combined like the old world with like sheep and the European tradition of pilseners and aggers.

Sounds weird, but they do it wet and combined it with the nursery of Ms. Doss in the early computer days, which funny enough. I mean, that's just that's that's the perfect blend of the two dudes that started that brewery because one of them is from Belgium, yod On, and the other owner is Sean He's from Georgia Tech. It's another one of the reasons why we love that brewery so much. So if you haven't, just right now just starch Halfway Crooks and just check out their merch. We

think it is just the dopest stuff around. And I feel bad because we should be talking about spyglass, but that we're talking about one of our favorite similar aesthetic and it's similar aesthetics on this beer. You'll see in the picture of this label. Why we're talking about you compare something that you've just experienced to something that you love and consider to be excellent. I feel like that

is the highest compliment. It's a good sign. So Spy Glass Rocks, thank you Gary and company for sending this one our way. We appreciate it. And Matt, that's gonna do it for this episode. For folks who want the show notes links to some of the things that we mentioned on this episode, just go to our website at how to money dot com. That's right. So that's gonna be it until next time. Best Friends Out, Best Friends Out.