You know what it is. That's right. It's time to talk money with your money nerd and financial coach. Now tighten those purse strings and open those ears. It's the money talk with Tiff podcast. Hey, everyone. I am so excited because I have a very special guest on the line today. I have Rod Griffin from Experian, and he's here to talk to us about credit misconceptions. So, hey, Rod, how are you today? I'm great. Good morning, and thanks for having
me. Yes, thank you so much for taking time at us of your busy schedule to talk to our audience about this. So let's just hop right in. So, first and foremost, who is Experian? Just so we can lay the groundwork for people. Sure. Experian is an information services company, and we're best known as one of the big three credit bureaus in the United States. That's just actually one of our businesses. But we do lots of things
around information. So, you know, just to kind of give you a sense, we're actually the world's largest information services company. We have operations in more than 30 countries. But your credit report never leaves the United States. So we operate essentially independently from nation to nation, and we have businesses around fraud and identity theft. We have an automotive history business. So if you want to learn about the used car you're about to buy, you can get an Experian auto check
report and learn more about that. We have a business that helps healthcare providers with cash flow management and is working on tools to help people better manage their healthcare information and relationships with their doctors. So a wide range of different businesses. But for today, we're the credit bureau side of our company. Yeah, perfect. And I'm glad you went into all of that, because I had no idea. You know, everybody's so focused on credit, and that's what we know
Experian as one of the big three. So with that, that being said, when it comes to credit, what are some misconceptions when it comes to credit scores, credit reports, things of that nature that you've seen in your work? Sure. How long do we have? Because we can go on a long time. So just sort of the kind of the. I guess I hit some of the top ones that always come to mind. The first is that credit is bad. You know, credit isn't bad. Credit's a financial tool. Debt is the financial
problem. If you take on too much and you don't have to have debt to use credit. The example I often use is that if you have a credit card and you make all of your purchases each month, and then you pay the balance in full. And when you do, you get cash back on purchases or discounts on things you buy, or airline miles or whatever it might be. That gives you financial advantage. And you
don't take on any debt, so you don't have to have debt. When you have credit, usually there's some debt associated, but at the same time, you also can use credit to help you improve your financial life and your overall lifestyle if you do it wisely. There are, for example, most of us can't buy a house using cash. So if you have credit established, you're using it well. It can help you achieve the goal of homeownership. Most of us can't buy a new car with cash, but we
can work toward that. And good credit will help you save money by having lower interest rates, and better terms will help you access other kinds of financial services and resources. Having a credit history is one of the keys to gaining access to better financial opportunities. And that, I think, is another common misperception that, that a credit report is a barrier to financial
opportunity when it really should be the opposite. If you're using your credit well and you understand how credit reporting and credit works, credit becomes a financial, very powerful financial tool to help you have other opportunities and is really key to opening the door to those other kinds of financial agreements. That's one of the things I want people to understand, is that we
want you to have a strong credit history. We want to help connect you with business, with other financial services providers, with banks and so on, because that's going to empower you to be more successful and have a better, stronger life. And that's what we really want to have happen. Yeah, I was just going to say, that is so true. And that's something that I tell my audience all the time. For a long time, I was scared, terrified of credit.
And it wasn't until I was in, like my early twenties or so where I finally broke down and got a credit card. But it was like the best thing that ever happened because, you know, I bought my house when I was 26, you know, buy cars, whatever it is, and I couldn't have done that had I not started paying attention to my credit and actually getting credit. So I'm glad that you mentioned that.
Yeah, I mean, it's, it's a different way to think about it. Many times, you know, we think about credit being this thing that gets us into trouble, but it's like any, you know, I still, people it's like any tool. If you have a hammer and you hit the nail with it, it's great. If you hit your thumb, not so much. So it's how you use the tools that you have available. And if you use it well, it's going to give you much greater opportunity in, in the long term,
you know, so a couple of other kinds of misperceptions. You know, people are afraid to get their credit report because they're afraid it will hurt their credit scores or hurt their ability to get credit. That's absolutely not true. You can get your credit report as often as you like, and you should know what's in it. You should get it. I always tell people a minimum of once a year, probably more
often than that. You can subscribe to free monitoring services. Of course, experian has the monitoring service, as do others, and get your credit report and credit score once a month. Know exactly what's there, make sure you're not a victim of fraud or identity theft. And if you find evidence, it can help you recover and restore your credit history. So it's a very important tool to help protect you, and it, again, will help you build your credit scores. You'll know what's there.
It doesn't affect credit scores. To get your own credit report, you can actually get your credit report 156 times a year for free through annualcreditreport.com dot. So, you know, it was the losses. You can get it once a year from each of the three bureaus. So you could get three. But the credit bureaus have now made permanent a policy that if you go to annualcreditreport.com, you can get your credit report from each of the three bureaus free once a week. So
there's no reason not to check your credit report. You don't have to worry about it affecting credit scores or hurting your credit in any way. And I guess to touch on credit scores, there's a ton of misperceptions around credit scores. They start with, a credit score is not the same as your credit report. I often hear people connect the two as if they're the same or talk about them as if they're the same and they're not. A credit score is a tool that's used to analyze the information in your
report. It's what lenders use to help them predict the likelihood you'll repay a loan as agreed, and it reflects the information in your report at a moment in time. The way I kind of describe it is if you think about you being in school and you do a paper that's like the credit report, the teacher is kind of like the lender, the banker. And the credit score is like the grade that the teacher gives. It reflects the
information in that paper, and that's what a credit score does. And it will change as the information in your credit score or in your credit report, pardon me? Does. So I always tell people, don't focus so much on the number. Instead focus on what's in the credit report. That's going to help you improve the strength of that homework. Right.
Or the test you've taken. That's going to help improve the credit history. If you take care of your credit history, the credit scores are going to take care of themselves. And I think one last thing I would touch on is people often ask me, why are there so many different credit scores? And you have three credit reports, one from Experian, one from Transunion, one from Equifax. There are lots and
lots of different credit scores. And the reason is that there are different types of lenders, and there are different types of lending. So a credit union, for example, has a certain type of customer. They have certain characteristics, and so they have credit scores that reflect and help them predict the risk associated with their customers. If you are a national bank, your customers have different kinds of behaviors and different kinds
of financial needs and accounts and those sorts of things. So they have scores that reflect their customer behaviors and help them predict risk for them. The same thing is true for credit cards or mortgage lenders. They're looking at different things, and then there are different types of lending. So if you're getting a credit card, they want to predict the likelihood that
you'll pay your credit card bill on time. If you're buying a house, the mortgage company wants to predict the likelihood you'll pay your mortgage on time. If you're buying a car, they want to know your pay your car loan on time. They may not care so much about the other types of accounts you have. They do, of course, but it's, you know, they're looking at what kind of loan are you getting, because people will pay them differently. And the things
that indicate risk from a credit report for each of those are different. And that's why there are different credit scores. They're just trying to predict different kinds of things for different kinds of consumers. So it's. So there's lots of scores. Three credit reports. Gotcha. Gotcha. So just to recap, all of the credit scores that a person could possibly have are originated from those three
credit reports. Correct? Yes, in a way. So they're calculated using the information from the credit reports, but they can come into, they can be done in different ways or calculated by different, in different places. So if a lender comes to experian and, you know, you've applied for a loan, they can come to Experian, say, I want. I want Tiff's credit report, and then I want a FICO eight score applied. When you
send it to me, Experian can provide that service. So we would, we get paid for compiling the credit report, and then FICO gets paid for their score, and we route the report through the score. And that score is Fico's score. It's not experience. We don't know as a credit bureau what that formula is. That's proprietary to Fico. And there are actually something in excess of 200 different scores we can do that for. So that's one way scores get calculated, and we send the
report and the score together to the lender. And when the lender gets the report, they can say, well, I want to see this on my screen. I want the identifying information from the report, and then I want the scores, and then I want the rest of the report. And so it looks like the score is part of the report, when in fact, it's not. It's a separate process, two different things, but they're delivered together, if that makes sense. So that's one way scores happen.
Another is that we send the report to the lender, and then the lender calculates their own scores. I mean, most of the large lenders have their own risk management divisions, is what they call them, and they have their own scoring systems, and they'll apply the scores then. So we wouldn't be
involved. If you're buying a house, there are third party mortgage reporting companies, and you said they get the reports and they get other information from the application, and then they would calculate a score and send all of that to the mortgage company, so we wouldn't be involved in the scoring process. So scores can come from several different places. Very cool, very interesting. I never knew that.
And, you know, when you think about, you know, the big credit bureaus and when you go to, like, a lender, for instance, and they're like, oh, we're gonna pull, you know, you never know what's going on in the back end, like, how everything is getting compiled for them. But I'm glad you brought that up, because that is something that I hear a lot of, you know, people might check, like their credit karma or credit sesame, whatever you know, those are, and they're like, oh, this is
my credit score. And I'm like, you actually have hundreds of credit scores, but they're all real. And they're all valid. You know, I hear that, too. You know, what's a fake Oscar? What's an educational score? Well, they're real credit scores. You know, with some of the others, there's. Vantage score is a big player in the, in the credit marketplace. I just saw a statistic from them that their, their presence grew by more than 43% last
year in the scoring world. And so they're becoming more prevalent in sort of the non lending areas where credit reports and scores are used. So things like getting a cell phone, for example, or utilities, those sorts of things. Insurance, potentially. You know, they're not your traditional lending kinds of circumstances, but they use credit reports because you're paying a bill that's very much like a loan. It's once a
month you have a bill. It's the same amount you paid each month. So they're making a financial decision, and they will look at credit scores. So vantage score is a big player. Fico, of course, is the one people know about. And then there are other custom scores, and they each have more than one score. And again, for the reasons that I kind of touched on earlier. Yes, yes. Now, if someone's listening right now and they're like, all right, Rod, I hear you. I
understand how all this works. My credit score is in the trash. What is the first thing you think people should do or work on when it comes to their credit score? Like, what has the biggest return on investment? Yeah. So the first step is get your credit report and a score and then a list of what we call the risk factors that go with that score. And when you get your score from Experian through our free monitoring service, for
example, we give you a credit report. We give you the score, a FICO eight score, and a list of the things that are most affecting that score. And we call those risk factor statements. Those will tell you exactly what you need to work on in your credit report to make that score better. So that's where I would start. Get the information you need to empower yourself. Know what's affecting that
score. Sometimes they sound kind of funny. People are like, this doesn't make any sense, but they are telling you exactly what's having the biggest impact. And you can look at your credit report and tie those back and know exactly what you need to work on over time to make them better. There are really only two things that you need to do every single time, every month to have good credit scores. And that is you have to pay your bills on time, every single time. If you
miss a payment, it's going to wreck your credit scores. And then you have to keep your credit card balances as low as possible. So if you can pay your credit card balances in full each month, that's the best thing to do. And if you're doing those two things, your scores are going to be fine, because all of the other stuff that goes into scores follow those. So you know, you'll build a length of credit history. You'll have
a mix of credit over time. You won't have lots of new inquiries or new changes in your credit history. So if you're paying your bills on time and keeping your balances low, that's gonna help you have the best credit scores. And that's often easier said than done, but that's what you have to do. Gotcha. Gotcha. And I wanna hit on one thing that I hear a lot of, and this is very much so in the social media streets, but just dispute everything you can just
dispute, and then it'll just fall off. So if you can just hit on. That for a minute, well, you can dispute everything. It probably won't just fall off. So if you find something in your credit report that you believe is not accurate, you absolutely should dispute it. And that's what that process is for. With Experian, we try to make it as easy as possible. You can go to Experian.com dispute. If you don't have a current copy of your credit report, we'll give you a free one right there on the
spot. And beside each entry, there's a button, and you can say, I need to dispute it, click the button, and then follow the instructions and submit the dispute. There's no cost to do that, and it doesn't affect lending decisions in any way. And you absolutely should dispute the information, the scheme, in what I think of as sort of the illegitimate credit repair kinds of schemes that they have that they'll tell you to dispute something over and over and over again, and
eventually it will come off the report. Well, what they're really trying to do is take advantage of what they'll tell you is a loophole in the law. So a lender, if you dispute something, has to respond to the credit bureau within 30 days. And if they don't,
we'll remove that account from the credit report. But what the credit repair companies don't tell you, and you know, they don't tell you on social media is that if a lender misses that dispute, they can tell us to return the information to the credit report, and
then we just have to send you a letter saying it's come back. And that was a change in the law in the early two thousands because credit repair was trying to falsely manipulate the information by submitting literally hundreds of disputes on an account, hoping that that would happen. And Congress even saw that. There needs to be a mechanism to put it back when it's accurate, but it's just a scheme that was being manipulated in the law to get it taken
off. So that's where that generally comes from. Gotcha. Gotcha. So really what's happening is they're disputing it and then waiting for the other party to respond. If they don't respond, it falls off. But it always has a chance to come back if it's an actual legitimate
thing that should be on your credit, right? Yes. And the source of the information, usually lender will tell us, you'll send a notice saying this account information should be restored to the credit file and in response to the dispute, and then we will send you a notice that it has been returned. So that's how that would work. Gotcha. Gotcha. So everybody listening, be careful. If it's actually legitimate, it may turn right back around and come back on
your credit report. So thank you so much, Rod, for joining me on the podcast today. This was very insightful. I've learned a few things just from our conversation. So if people were interested in finding out more about Experian or you, where could they find you? Sure, they can go to experian.com, of course. And we have something called ask Experian that answers questions and provides lots and lots of information. You can search for any, just about any topic. Great place to
start. You can join us on credit chat every Wednesday at 02:00 Central, 03:00 Eastern. You can learn more about it at ex PN credit chat. We have wonderful conversations about personal finance topics, credit and other things. So, you know, you join us there, and we're happy to be thrilled to have you with us and sharing your knowledge and experience and others as well. And I'm on Twitter odd Griffin and out there and about just about everywhere else. So, you
know, join us and be part of the conversation. I think that's the most important thing you can do. Yeah. Thank you so much. I will make sure I have all of those links in the show notes and just a quick note about the credit chats. I'm actually a guest occasionally and it is very fun, very good information. It's usually a panel of a few of us talking about a certain topic for that week
and I love the conversations. Highly recommend if you're over on X, formally known as Twitter, definitely check those out. And one more thing I wanted to mention about Experian and also the other credit bureaus are credit freezes. That's something that I also do as well. So check out the Experian website and just mosey around. It seems like I need to do a little moseying myself. Thank you, Rod and I hope you have a wonderful rest of your day. Thank you. You too. Take care. Thank you.
Bye. Thank you for listening, joining and being a part of the Money Talk with TIFF podcast this week. You can check Tiff out every Thursday for a new Money Talk podcast, but if you just can't wait until next week, you can listen to previous podcast [email protected] or follow TIFF on all social media platforms. Forms at money talk with t until next time, spend wise by spending less than you make a word to the money wise is always sufficient.