More Money Podcast - 213 How to Play the Credit Game - Richard Moxley, Credit Expert & Author of The Credit Game

Episode Date: November 13, 2019

I think we can all agree, the world of credit and credit scores can sometimes feel like a bit of a mystery. That’s why I’ve got credit expert and author of The Credit Game Richard Moxley on the show to finally make sense of things for all of us. Now, part of the reason there’s a lot of mystery in the credit industry is because the two credit bureaus in Canada, Equifax and TransUnion, aren’t completely transparent and like to keep private a lot of information surrounding how they score consumers when it comes to credit. Luckily, Richard has taken it upon himself to try to find out some of their hidden secrets and test things out so he can help consumers like you and me, and of course share everything he knows in his latest book The Credit Game. For full episode show notes, visit https://jessicamoorhouse.com/213 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome to episode 213 of the Mo Money Podcast. I am your host, Jessica Morehouse. Welcome back to the show. I feel like there has been a lot of chatter online. There's been a lot of articles coming out lately from like the CBC. There's some like marketplace video and there's, I feel like like global news came out with something or something like that. And also just a lot of, you know, conversations going on about credit scores and credit reporting in my Facebook group. If you're not in there, get in there. It's called the Money Life Balance group. Go to facebook.com slash groups slash Money Life Balance to get in. But anyways, a lot of people are talking about credit scores. And it's because there's a lot of confusion, a lot of just mystery around them. And it's like,

okay, what should we know? What can we know? Why is it so hard to understand this, right? There's just a lot of feels and I get it. I get it. Which is why I have Richard Moxley on the show, who is the, in my opinion, number one credit expert in Canada. He is based out of Calgary. I recently saw him speak at the Financial Fitness Forum that took place in Toronto. So it was this conference. I can't remember if I mentioned him on the podcast or not, but it doesn't matter.

So it is this conference that happens once per year. It is specifically for people that have my designation, Credit Financial Counselor Canada. It is for credit counselors, insolvency trustees, people in the credit sphere. I go there to get my education units to continue with my designation. There's always so many interesting speakers. And his, I just loved his presentation because it really went to the deep down and answered some very important questions about credit.

And he's done a lot of research. And he's, I mean, he's a best selling author. He has a new book coming out called The Credit Game that I will be giving away free copies of. So make sure to listen to the whole episode and the end specifically, to find out how to win a copy for yourself. But we're gonna do a deep dive. I got a bunch of questions. I asked him all the things I feel like you want to know. So you are going to love this episode. If you've always wanted to know more about credit scores, credit, credit reports, what the hell is going on with the credit bureaus? Is it a scam? All this kind of stuff. So before I get to this interview with Richard, I just have a few words I want to share about this episode's sponsor. This episode of the Mo Money podcast is supported by Policy Me. One thing I can remember as clear as day is when I interviewed financial

expert Preet Banerjee for the podcast, he told me right after we finished recording that I needed to get some life insurance ASAP. He talks about the importance of life insurance in his book, Stop Overthinking Your Money. And even though I read his book and had him on the show, I still didn't have any. So guess what I did as soon as we finished recording? I started researching my options for life insurance in Canada. And I'm not joking when I tell you that once my husband and I finally got life insurance, it was as if a big weight lifted off our shoulders. No one can predict what will happen in life. So the smartest thing that you can do

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life insurance brokerage who promise complete honesty, transparency, and security, who will work hard to find you the best policy for the best price. Life insurance isn't just a should-I-buy decision. Figuring out what should I buy is just as important. To learn more, visit them at policyme.com slash mo money and make sure to check out their long list of positive reviews from past customers. Once again, check them out at policyme.com slash mo money. Thanks so much, Richard, for joining me on the show. I can't wait to chat with you about credit. The fun topic of credit. You know what? I love this topic, actually, because I feel like I haven't had I think part of the reason I wanted you on the show is I haven't had too many guests who were

specific like credit experts. I have had one in the past, I think it was a few years ago, but he was based out of the state. So it's nice to have like a Canadian who can talk about Canadian credit stuff. And I feel like the topic of credit and debt, it's just shrouded in so much secrecy and there's so much confusion and conflicting ideas and no one really knows what's going on, it seems like. Yeah, Equifax and TransUnion definitely like to keep their algorithms, their scoring system very close to the chest. And unfortunately, we also get a lot of information from the states, which, you know, sometimes works, but a lot of times needs a little bit of clarification. Like one common thing is a lot of people think that there's three credit bureaus in Canada because they get that confused with the states where they also have Experian and we do not have that. That's correct. Yeah. So just Equifax and TransUnion for us. Exactly. Now, before we

dive deep into all the questions that I have, because, man, there's so many conversations going on online of people wanting help or wanting an answer to their question. And then you get five different answers that all conflict, which is very frustrating. But I want to get to know you because you have a book coming out called The Credit Game. It is very in-depth that really answers, I think, a lot of important questions that people have, which is so great. But how did you become this credit expert? Why did you get so deep into this world of credit? Well, you know, when you get asked when you're younger what you want to be when you grow up, I definitely never said credit expert.

Yeah, I don't think most people would. Yeah, it's not one of those cool things that kids say, but really, I fell into it like most people do. My history is eight years as a high volume mortgage broker. And so I dealt a lot with credit. But the first time I actually even saw my credit report was when I became a mortgage broker. So the first time I saw one, I hadn't even seen my own yet. And here I am looking at other people's credit during the course during, well, just even any education that you receive, they don't go through the credit report in detail. So they kind of say, here's the score, here's what you need to have. This is what the banks want. And if anyone doesn't have that kind of credit score or there's something wonky on there, then essentially you have to say, okay, well, I can't help you go fix your credit and

come back to me. But as a mortgage broker, I was a hundred percent commission, which means you got to, you know, eat what you kill, if you want to put it that way. And so essentially, I was very motivated to make sure that my clients, you know, if there was a problem, how do I fix it? And so I started asking questions, starting to talk to lenders and say, okay, well, what's the problem here? And unfortunately, there is no real information source when it comes to Equifax and TransUnion. They don't really have a call center to answer questions. They ship everything over to the Philippines. Yeah, I've been on the phone with them before. It's very, it's very frustrating. Yes, it is a very frustrating process. And so essentially, what I decided to do was not trust

what I was being told, but actually take 1000s of credit reports and reverse engineer the scoring system on how the scoring Equifax and TransUnion algorithm works. And that's essentially, as I got started, and you spend that much time focused on one subject, you start developing a passion for it. Yeah, and that's definitely what I found because you recently spoke at the financial fitness forum that I went to not too long ago for all these, you know,

it was a big room full of like credit counselors and insolvency trustees, a bunch of like super nerds, like so niche. It's crazy, right? Like, it was just like, this is so funny that there's all this, all these people so excited to talk about debt and credits. Hilarious. And I was the biggest nerd of them all. You were, but you were like, also like everyone like everyone was like oh my god this guy's like so many people loved your presentation they thought it was so great so yeah it was so fun but um one thing it was fascinating was when you were speaking though i would see other people watching you and they would be like oh oh my gosh i had no idea so even people that are like professional

credit counselors were still learning new things because again, you know, we, we, we learn stuff doing the program to get our designation and we try to learn as much as we can, you know, from other resources. But again, there's just like, so it's just, yeah, there's not a lot of like black and white information, but I feel like you probably have a lot of those answers that we're looking for. So I kind of want to start us off with, um, you may be debunking some kind of common myths that a lot of those answers that we're looking for. So I kind of want to start us off with you maybe debunking some kind of common myths that a lot of people have. I'm sure there's some that have come your way and you're like, yeah, that's just not true. Yeah. No, it happens all the time. So those are fun. Yeah. Okay. So one myth that I hear a lot of is that you shouldn't just have one credit card. It will actually negatively

impact your credit score. Is that just kind of a bit too simplistic or is that untrue or what do you think about that? So just to clarify that the myth is that you should only have one credit card? Or you shouldn't. You should have more than one. If you only have one, that's bad. So when it comes to actual credit cards, banks and lenders would prefer to see two. Now, where a lot of the confusion comes from, what I get on questions, is that people feel like they should have all types of credit. So mortgages, cell phones, lines of credit, loans, credit cards, all of the different types of credit. You don't have to have all types of credit in order to have good credit. Yes, it may slightly

bump up your score, but most of the time, because of other categories, it will do more damage than good. And then all of a sudden, you're spending interest just to have good credit. So one of the things that I was really passionate about and wanted to focus on with the book is bring theory into real life. Because when you look at one aspect of any type of financing, you also have to look at how that affects in real life scenarios. And to go and say, hey, go get all types of financing, you also have to look at how that affects in real life scenarios. And to go and say, hey, go get all types of credit, you know, just to have good credit, which people like to obsess about, you know, yes, you could bump up your score a few points, but is it really worth paying hundreds or thousands of dollars worth of interest

just to have, you know, a few points extra on your credit score? I don't think so. Yeah, no, I think that's actually really important to say because, well, A, I think a lot of the people or resources that are saying, oh, definitely get more credit, it'll boost your credit score are companies that are selling credit. So that's something to keep in mind.

But that's something that I thought kind of throughout my 20s was, in order to have a good credit score, yeah, you need to have multiple credit cards, you need a line of credit, you need all this and that. And I'm like, I've never had a line of credit in my life. And I've got great credit scores. So what does that say? I think there's people think, yeah, you need a lot of credit to have a great credit score, but that's not necessarily the case. Yeah. And the ideal amount is between two or three accounts in total. And when I say accounts, I'm not talking bank accounts. I'd be referring to if you had a mortgage, great, that's one account. If you have a loan, then that's one account. But really, you could have two credit cards and not have any other

type of credit. And you can have amazing credit. So you don't have to complicate things. Although some people would see credit cards as complicated. But yes, you do have to have credit in order to have active credit and to have a good score. But you don't have to have every type of credit. You want to focus on the type of credit that you can actually handle as the most important. Yeah, no, absolutely. And I think that is kind of the frustrating thing too, is you have to have credit to have a good credit score. And the only reason you want a good credit score is so eventually down the road, you will want credit. You can get it. You're like, what? It doesn't make any sense. It's like, exactly. Yeah. It's, it's, it's, it's frustrating. Cause it's like for some of me and you may,

you know, probably feel the same way. It's like when I see people in debt, it really pains me because it's like, it's because of the tool of credit that got them there. And yeah, also they didn't have very good, you know, habits. They may not have known what they were getting themselves into and all this stuff. So credit can be a great tool, but it can also be a tool to really, you know, mess people's financial lives up too. Yeah. And one of the things that I always try and focus on is take each person's situation and how do we, how do we take the theory or how to have good credit, but make it work in their lives and the way that they interact with credit or do their finances in general. So I was actually just talking to someone yesterday, and he was completely against having credit cards. And I said,

I completely understand the thought process behind that. I would love to tell you, just get rid of your credit cards, cut them up. I know there's a lot of financial professionals or thought processes behind that, and I understand it. But one of the great tips that I pass on to my clients is, if you know how it works, or you know how to play the credit game, then you can actually make it work for you. So what I suggested for him is that he just take his Netflix bill that he's already paying and then have his credit card pay that Netflix account. And then at that point, he could go into his bank and have it automatically paid. Does that make sense?

Yeah, 100%. So instead of just paying directly to Netflix, you would just put your credit card in between there. And then at that point, you could cut up the credit card and never use it again. No temptation. It's being used and paid off automatically. And then essentially, you don't have any headaches. Yeah, no, that's exactly what I suggest to my clients as well. If you don't, if you've just, you know, basically don't have any headaches. Yeah, no, that's exactly what I suggest to my clients as well. If you don't, if you've just, you know, basically don't have very good experience using credit cards and I'm the same way. Like I don't like actually using a credit

card for my day-to-day spending, my variable spending, because I will overspend. I do it every freaking time. So that's just, that's a habit I have, right? Getting points. Yeah, yeah. And that's the other thing too. People are like, but the points, I'm like, please. You know what I'd rather have? Cash in the bank. My investment's going up. You know what I mean? So I'm not obsessed with points, but that's just me. But I always suggest the exact same thing. It's true. It's like you do honestly need a credit card to help you be able to do your credit. It's proven you do need to do that. But you don't have to use it for all of your purchases.

Just put one or two kind of fixed bills, like your phone bill, your Netflix or something, and then you can pay off that credit card immediately. That's another actual myth that just popped into my mind. Is it good or bad to pay off your credit cards immediately? Not waiting for that bill to come in or that statement, but just as soon as you put a purchase on it. Some people think it may negatively impact your score or it's not a good thing to pay it off immediately. I hope you don't have any credit card sponsoring this.

No. But essentially, when it comes to credit, yeah, that's a huge myth. And I don't know who started it, but probably the banks and lenders or companies. But essentially, you can pay it off right away. You do not have to keep a balance. You do not have to wait until the statement comes out. And because I also like talking about debt with my clients and trying to help them move past that, I don't suggest it because it's just a terrible way to live, to wait until the end of the month to pay all your bills. You should be doing it right away so that way you're not thinking you have money that you don't. Yeah, exactly. Because that will happen if you wait for a full month. You're like,

oh, I've got so much money in my bank. And they're like, oh, wait, I owe like $300 on my credit card. Oh, wait. So yeah, for me, I don't do it like right as I do it. But I pretty much check my credit cards, maybe once a week and see what's going on there. And then just like pay it off as I kind of go, it just gives me peace of mind. And and then I don't forget because, you know, I feel like we've all been in that situation. I've been at two, you get busy. This usually what happens when I'm traveling, and I just you just kind of forget to check your bank accounts. You forget to check. You're like, oh, I'm a day late or a couple of days late. That's another thing too that people freak out about of how bad are the ramifications if you're a few days late paying what you owe on your credit

card. Yeah. I love that comment. I didn't miss the payment. I was just late. Yeah, yeah. That's true. And to the banks and lenders, essentially, you didn't comply with the agreement. And so, therefore, you're going to take a hit on your credit score. It shows that you're higher risk because you're not in control of your finances. Now, you know, once every couple of years is not a huge deal. Banks and lenders don't really care if there is a late payment on your credit report. But as soon as it happens, it will drop the score drastically. However, within a few months, you know, probably six months or 12 months, then it becomes older news. As long as you're not trending to do it on a regular basis, then the banks and lenders put less emphasis on it. Oh, good. Yeah, that's another thing. People just freak out. They're

like, oh my God, I ruined it and there's nothing I could do about it. It's like, you can rebuild it. Just because it goes down, it can go back up up but i think a lot of people are just so freaking worried about their credit score uh dropping i want to kind of dive deep because i know you have um sections that talk specifically about why you should not obsess about your credit score do you want to kind of talk a little bit about why people shouldn't obsess about it even though they do all the time i see like experts you know especially in States, I feel like it's a very big topic that people like to obsess over. And unfortunately, this obsession has really come over to Canada. I find that when I first started about six years with, well, I guess 2012 with my first book,

it was kind of a new conversation. People weren't talking about it all that much. Now, people won't shut up about it, which I guess works for me. But for the actual consumer, really, the score itself is just a snapshot in time. And the score is very misleading. And so I don't suggest people obsess about it. The biggest problem that I see with credit and what I don't like about the whole credit scoring system is that consumers don't have access to the real credit score. And when I say real credit score, I mean the one that is actually being used when you look or get approved for any kind of financing. Yeah, I remember you saying that in your presentation. People were like, what? And what are you talking about? Equifax has updated their website. And if you look on point number two, it essentially just tells you that it's for educational purposes only. I don't know what it's educating you on,

but essentially they're saying that there's multiple types of credit scores or sorry, multiple scores, and a banker lender has the option to choose which one they're actually going to use. And the one that they provide to the consumer is generally not used by banks and lenders. So what does that even mean for us then? It means that people need to stop focusing on their score and learn what I call the rules of the credit game or, or know how to play the credit game. Because if, if you're focusing on the score and you don't know what points generate what, or why it just dropped 40 points, uh, essentially you're going to drive yourself mad trying to figure out what's

going on. And that's why people are obsessing about it, checking it all the time. Now we have all these free third party apps, uh, you know, that, that like email you once a month being your score is updated.

And I'm like, I don't care. Yeah, exactly. And you know what? I love credit. I talk about it all the time. But I only check my credit generally once every few months when it comes to the actual credit report. And I don't care what the score is, because as long as I'm getting

approved for best rates and best terms, that's what matters to me. Other than that, it's just a badge of honor or just a game you can play with other people to compare. But I'm like, who's sharing credit scores with each other, really? Yes. So it's one of those things where knowing how to play the credit game is really what matters. Now, I remember you mentioned when we were at that conference that there is a specific number, like threshold, that will allow you to get the best rate, best terms. And then anything above that is just gravy. It doesn't actually matter. What is that number that people should be aware of? So the magic number is 700. Now that may shock a lot of people because when you look at the credit report that a consumer has access to, or a lot of these

categories online, that doesn't really put you in the excellent category. But when it comes to banks and lenders, if you have a 700 and above, that's really what they care about. If you have a 800 as opposed to a 750, it's like, great, good for you. You have a little bit more of a buffer, but it's not something that people should obsess about once again. I have some clients that will come in and they actually have a 720 and they're like, okay, how do I get to 900? Which is, you know, the highest you can go. And I say, you need to talk to someone else. Cause I don't want to like, I just don't care. You know, like here, read my book or whatever, but I, I don't like, I'm not going to take someone's money or work with someone if they just want to

get to 900 because it's, you're just going to screw up yourself financially worrying about something that doesn't even matter. Yeah, exactly. So everybody, there's the T, 700 is the number. I remember when you said that, I'm like, oh, because I have two different, and I don't know if you'll be able to answer this, but possibly it probably a pretty simple answer so you know I you know over the summer checked my Equifax score my TransUnion score they're different scores that's fine but like almost kind of not drastic but you know Equifax is always always higher than my TransUnion and it has been for years is Is there like, they just like score differently, like significantly? Like what would you, is that common or not common?

Yeah, it's more common to have either differences between the two or at least differences in the score. It's actually very rare to have the exact same score between Equifax and TransUnion. Oh, okay. So that's, that. Okay, gotcha. Okay. Yeah. It's two separate companies and their scoring system or algorithm is different. But the other thing that throws off a lot of people is that not all banks and lenders report to both Equifax and TransUnion. So if you have a collection, it may or may not show up on one or the other, or it might not even show up on either of them, or it might show up on both. So people will ask me or bring me a credit report. And then I say, well, I have to grab TransUnion or the Equifax or the other one. And they're a little confused. No, I just want my

Equifax fixed because that's what my bank looks at. And I say, well, that's great. But you need to know, you need to check both credit reports to really know what is going on with your credit. Otherwise, you could have a bankruptcy show up on one and not the other. Not that it's yours, but there could be errors that will stop you from best rates of best terms. Absolutely. Well, and another thing, too, like kind of going more into like the fraud identity theft situation. I had a friend who signed up to one of those companies to get their the credit bureau contacted her work saying, oh, she's some kind of collection because someone actually was able to steal a credit

card that was only reporting to TransUnion and she had no idea. So from now on, she's looking at both. So it's very important to check both. I had one girl call me and she had read my first book and she called me and she was a little upset. And she said, I've been reading your book and I cannot get approved for even a secure credit card. And I've looked at my credit report and it's fine. I don't see what the problem is. And I was a little worried. First, you never like to get the bad feedback, I was a little confused and so I actually said okay

you know what I'm going to look at both credit reports I'm going to do a review with you and I'll let you know what what we can do anyways I looked and it turns out with Equifax she was dead oh my gosh yeah and I was like that's kind of the reason why you can't get approved even for a secure credit. Because to Equifax and TransUnion, you're actually deceased is what it has on there. And so that was kind of a funny realization that you really need to check both credit reports to know what's going on. And if there are errors, then get them fixed. And did that most likely happen because someone that had the same name was deceased or something like that? Yeah, it's a computer system, so it can go wonky for a number of reasons. But yeah, that is one main reason is

that you'll have someone else's information pop onto your credit report in some way, somehow. Wow, that is crazy. I want to ask you a question that actually popped into my Facebook recently, and there's been a lot of chatter on it. So someone asks, what would be the pros and cons of getting a credit card limit increase? Basically, they keep on getting, you know, the banks are like, hey, you've been pre-approved for this credit card increase. And they're just asking, like, is it a good idea to do it or to not? Or maybe it wasn't a credit card. Sorry, let me rephrase that.

I think it was a line of credit. But in any case, what would be some pros and cons of being like, okay, yeah, sure. I'll sign up for that credit card increase. I don't have to pay for it. It's not, you know, they're just giving it to me. So this is where different perspectives on looking at theory and real life really are very

important. And this is why there's so much confusion about it, because a lot of people will talk about one aspect and completely ignore the other aspect. Now, when I was studying thousands of credit reports, I essentially applied for every credit card that came my way. And I increased the limits every one I could, any one that they would actually offer. And this was a number of years ago, so they were doing it quite often. And I was doing it to test the theory of whether limits or high limits were actually bad for your credit. There's no, there's nothing. So I was up to about $160,000 in credit card limit, and there is no negative for that on your credit score. Really? However, having said that, obviously, I don't suggest that with people to do. I went to the extreme just to see if there was any cutoff or limit, but I couldn't find anything with Equifax and TransUnion. because individual banks and lenders, when you go and apply through the branch, a number of banks and lenders will actually max out your limit in what they call their debt servicing. So your income versus debt or what your monthly payments are. And so if you have, let's say a $10,000 credit card or line of credit, and

they're maxing it out, it means that even if you keep a zero balance or a lower balance on it, they will take generally 3% of whatever that limit is and put it on their monthly payment calculations. So even though they're charging you not 3% every month, and your monthly payments are a lot less, that doesn't really come into play with the debt servicing. So to your credit score, no, there is no negative. And a lot of times it's better to have higher limits, just because then your balances are less.

Hopefully that is the goal that your balance would be on like a lower percentage. And so it will keep your score higher. However, you've got to be careful that you don't go out of control with it like I did. When you go to the bank and lender, they will max out those limits. And then all of a sudden, you're qualifying for a lot less because they have it in the system that you have these high monthly payments, even though you may not. Oh, interesting. Yeah, that's something I've never heard before. And it's fascinating too, because yeah, recently I was checking my scores and my transunion wasn't as high

and i'm like i want to get a bit higher and now i don't care because i've talked to you but uh anyways and it has a list of actual suggestions and i went through the actual you know transunion portal and it said one of the things oh you have too much credit that might be negatively affecting your credit score but you're saying they may just be saying that there's no evidence to really show that that could happen. Who knows, really? Yeah. Actually, that narrative that you're seeing, that is generally referring to, or sorry, is referring to when you have too many accounts with balances on it. So if you have, that is one thing. See, when I was doing my testing, I didn't have any balances on the 20 credit cards that I had. And so that was the

main difference. So that is a great point to keep in mind that if you have balances registering on each one of those cards, if you have more than four or five different cards, then that will actually start lowering your score. But if you keep it at a zero balance and only use it once a month or a couple times a month and then pay it off right away, then essentially the limit or how many cards you have is irrelevant. Interesting. Okay. Yeah. I mean, I never have, I mean, I always pay my credit cards off, but maybe at that point when it was reporting. Yeah. The snapshot. Yeah. The snapshot. So yeah, I'd love to talk about the snapshot because I get that question a lot too, where people are like, oh no, I always pay off all my bills on time. So I don't know, you know, why my score would be like

this. It's like, well, so do you want to kind of explain how they had the reporting works really in general or how these credit bureaus kind of take a snapshot of what's going on? Yeah, and it's one of those things where it's very misunderstood and it catches a lot of people off guard because and that was actually one of the main reasons why I wanted to write the first book was because of the fact I would have people that are doing everything right when it comes to their finances, but then their score would be like a 620, 630. And they're wondering why. And I was wondering why, because I couldn't figure it out when I first started. But one of the biggest indicators, or not indicators, but one of the categories that affect the score the most is your balance versus your limit. And so what these people were doing is that they were using their credit card a lot during the month, and then they were paying it off in full at the end of the month so that there was no interest, which is great financial principle to do. However, Equifax and TransUnion do not have live access into your credit cards.

So your RBC, TD, whoever it is, they submit information on your account every 30 to 90 days. And whenever that snapshot is taken, that's what you're getting judged on. So it doesn't matter that you paid it off in full the next day. Murphy's law will essentially mean that you're going to get caught with the highest balance possible on there. And that's what's getting registered. And that's what banks and lenders are going to be using to, or sorry, Equifax and TransUnion will use as far as to determine how risky you are. Wow.

Yeah. That, yeah, for me, I'm like, I'd never heard that before. And I'm like, that makes a lot of sense because, you know, I'm generally great. I know lots of people probably can relate to this. I'm always good with my credit cards and paying off my debts. But was there a moment where you put a lot on your credit card? Like, for instance, you know, I run my own events and I get sponsorship money, but usually that doesn't come.

I don't actually get the check from the sponsor until after the event. So I put everything on my credit card for me. I'm like, great. I get all these points. This is fabulous. But that snapshot happens during that time when I'm putting all that. Oh, it's not going to look good for me. Yeah.

And it's one of those things where, you know, as long as you're not doing it right before major financing or you will see the drop and it is drastic. A lot of people don't understand how much this affects the score. It's just as bad as missing a payment or sorry, being late on a payment on your credit card. So that's how much this rule affects the score. And so you want to make sure that you're really, really diligent on keeping it under that halfway point,

at least, and try and avoid the big purchases. So yeah, you just mentioned the halfway point. So I know kind of typical rule of thumb or what's been written elsewhere has been like, make sure to never spend more than 20 to 30% of your credit limit. But you're saying actually 50% is okay? So my big thing is if you're going to keep it at 30% or under, cool. I have no problem with that advice. Keep on going. The lower, the better. However, I say 50%. The reason why is because when studying the credit reports, I didn't see any huge point drop unless the balance was caught over the halfway mark. And what I always do in my seminars is ask people what's 30% of 750. And people have to think about that. Actually, they generally look around to wait for some mathematician to figure that out.

And then I say, that's the reason why I stick with 50 is because 50% of anything or half is a lot easier to figure out as opposed to these different numbers. And so that's the big thing is that we have to make sure about building credit or kind of some good practices, but I know there's probably a lot of people listening that do have bad credit, a bad credit score. And they're like, what do I do? And again, there's a lot of conflicting information. I feel like when we were at that conference, some people were talking about getting a loan versus not

getting a loan. What are some good strategies to improve your credit and build it back up to a good number? So one thing about bad credit is the emotional or the psychological thought process behind that. Just remember, and you referred to this earlier in the session here, but essentially it's just a snapshot in time. So I don't care if you've been through bankruptcy, which everyone kind of considers is the worst, which it's not, but's just a snapshot in time. So I don't care if you've been through bankruptcy, which everyone kind of considers is the worst, which it's not, but they just kind of consider that. So that's fine. Even if you go through a bankruptcy, within two years, you can qualify for best rates

and best terms with major financing once again. And so the amount of how bad your credit is, is just a snapshot of time. And so what I focus on and what I work with people is really just to understand that having a couple credit cards, using it appropriately, keeping the balances low, paying it off right away. If you do that, it will get you to where you want to be. It's that simple. It is that simple. So the whole idea of making it a game and referring it as a game is to help people understand

that really it's not that complicated. I actually feel bad when people are like, yeah, that's it. Yeah. Because they're expecting this very complicated process and what you got to do and hoops that you got to jump into. When it comes to the credit score or reestablishing, really, it just takes a knowledge of how to do it and then time. Once you do it, you can even automate it and it's pretty hands off and just runs in the background while

you deal with everything else that you got going on in life. Yeah, I think that's very important to note that time is so key because there are so many honestly dodgy things and scams out there. They're like, I can help your credit score, you know, boost your credit score overnight or blah, blah, blah. And I'm like, yeah, no, I don't know how you're going to do that. And they're just going to take your money and run or something. So yeah, like you said, it takes time.

Like it could take a year, if not more. And that's one of the things that I focus on because a lot of people ask me that question, how long will it take? And if you want to jump your score quick, that's the easy part. We can do that within 30 days and jump your score 150, 200 points. But going back to what I had mentioned at the beginning is your score isn't necessarily the most important thing about your credit. So even if you walk into a major bank with an 800 credit score, doesn't mean you're going to get approved. So we want to have a high credit score. But more importantly, we want you to get approved

for best rates and best terms. And when it comes to reestablishing your credit, a lot of times they're looking for 12 months, proving that you can handle those credit cards properly. So yes, anyone can manage a minimum payment of 15 to a couple hundred bucks for a few months. But can you do it when you just lost your job, when you've got health issues or on vacation? That's what they want to see. And so jumping the score is easy. And that can be done very quickly, hundreds of points. And that happens all the time. However, it doesn't mean you're going to get approved. And so that's why when someone asks me how long it's going to take, I have no clue until I see your credit report, because I got to know what's going on there in order to say how long it's going to take.

So I want to just end off because you mentioned credit reports. So I know, you know, it's again, like, you know, rule of thumb, check at least, you know, once per year. But if you're trying to maybe rebuild your credit, maybe you want to do that more often. What are some things that people need to like really look at? What should they be focused on when they're looking at their credit reports? Equifax and TransUnion. Try and ignore the score if you can. I know it's tempting. But as far as what you need to focus on, look at the personal information, make sure it's correct, because a lot of times address change or something means that you have someone else's information on there. So that's important. And then go into the individual accounts and see how long you've had it established. Are you making the payments on time? Or are you late occasionally?

When was the last time that happened? And then look at the balances that they're catching you at, because that affects the score a lot. And so if you're wondering why your score is so low, chances are, unless there's some kind of error on there, it's going to be because the balances were caught higher than the 50% mark. And then just go through it and make sure that the information is actually correct. That's the most important. And if they do see an error on their credit report, what is their first step? How do they fix that? So there's two ways to really fix your credit. You can go directly to Equifax and TransUnion and go through the hoops to get that fixed. In the book, I give some ways to minimize that

headache because unfortunately, it does take time and it can be a very frustrating process to get that done. If people need help or want someone else to do it, that's essentially why I left the mortgage side of things to focus on credit full-time is to help people remove errors and fraud from their, or dispute errors and fraud from their credit report. Amazing. So you mentioned you have two books. What's the title of your first book? The Nine Rules of Credit. Perfect. And now you have this new one coming out, The Credit Game. Where can people find out about your books and more about you? So they can, I'm sure lots of people are like, I need to talk to this guy. So yeah, creditgame.net is my website and you can get the order the book there

and then on Amazon as well. There's the audio book is going to be out here soon and it should be on pretty much all of the devices out there. But I'm not, I've never done an audio book, so I'm not sure how that works. So just go to my website, creditgame.net. Yeah. And then the different social medias, you know, if you have questions, you can reach out on the different social media sites there that are on the website as well. Amazing. Well, thanks so much for taking the time to illuminate, uh, this whole crazy credit game,

as you like to call it, which I think is really fun. I definitely encourage everyone to grab a copy of his books because I feel like you can't get this information anywhere else. So thanks again. Thank you. So I think we covered a lot of stuff in this episode, which is episode 213. Make sure to check out the show notes, jessicamorehouse.com slash 213. But of course, there's always so much more to know, which is why I highly recommend you grab a copy of his book, The Credit Game. It is not very long. It's not like a crazy dictionary novel situation. You know what I mean? It's digestible. You can read the whole thing very quickly and get all the answers you need to know. So definitely check that out. Also,

make sure to go to his website, credit game.net. There's info about his book, but also if you want to hire him, he does a debt review. So if you need some help and want his help, cause he is, you know, he knows what's going on. Uh, yeah, you can hire him. So why not? Um, and a lot of other great information on his website as well. So check it out. Stick with me for just a moment. I have a few words I want to share about this episode sponsor. And then I have some very, you know, important things as always to share with you. So do not go away. This episode of the Mo Money podcast is supported by Policy Me. Do you have life insurance? Because if you have a partner, children or aging parents who

depend on you for financial support, protecting them with life insurance is a smart idea. And guess what? It's not as expensive as you may think. For a 20-year, $500,000 term life insurance policy, which is actually what my husband and I have, it could cost you as little as $35 per month if you're in your 30s. Not only is it more affordable than you may think, but it's easy to get too. Especially if you try out PolicyMe, a new way to get advice, compare quotes, and buy life insurance online in Canada. especially if you try out PolicyMe, a new way to get advice, compare quotes, and buy life insurance online in Canada. And if you want to speak to a human, you can speak with one of their licensed advisors on the phone five days per week, or reach out over email 24-7. If you've been delaying checking off get life insurance from your to-do list, don't. This is me telling you right now that if you know that you need it, do something about it

now. It's affordable, it's easy to get, and having life insurance can save your loved ones from financial hardship down the road. To learn more and to get started, visit policyme.com slash mo money and make sure to check out all their positive Google reviews from past customers. Once again, check them out at policyme.com slash mo money. Okay, first and foremost, if you want to win a copy of his book, the credit game, go to Jessica Morehouse.com slash contest or the show notes Jessica Morehouse.com slash 213 213. And you can enter to win a copy of his book, but also all the other books that have been featured on this season of the podcast. I'm giving away a ton of books because I'm a crazy person and I just, I don't know. I just like giving away books. Why not?

So make sure to do that. Also super exciting tomorrow. I have a bonus episode for you because did you know that this week is credit education week? Yeah. So I, in the vein, because you know, this is actually a really great kind of a companion episode, I am going to have a guest to talk about credit and responsible credit use. So we talked a lot about credit scores and how to figure that stuff out. I want to really dive deep now into how can we be responsible with credit? What are some things that we need to do and not do to be good credit users and good people? Because so, well, I mean, I know

this because I work with lots of financial counseling clients. A lot of people don't know what to do. And I get it. It's a it's it's weird. It's a it's a weird situation. There's not a lot of education on this. You don't really get educated, I think, in proper credit use and debt until you're in debt. And you're like,, how do I, how do I fix this situation? So, uh, make sure to come back here tomorrow. Make sure to subscribe if you haven't already on my iTunes. And also if you want to continue learning about debt and credit, but all or other, you know, topics, you know, I have a YouTube channel that I've been putting out weekly episodes on lots of different topics. And, uh, you may want to check it out. Cause, uh,

I mean, yeah, like tune my own horn, but I think they're like pretty good. Just saying I learned how to do some makeup. So I'm like, okay, that looks way better than it did like three years ago. Uh, way more comfortable on camera. And, uh, I'm just like, I'm kind of a good time. I'm just going to, you know, what? Okay. Whatever. Um. So if you want to check me out on YouTube, please do go to Jessica Morales.com slash YouTube, or just go to I think it's youtube.com slash C slash Jessica Morehouse one off. Just just like in the search in YouTube, just find my name, Jessica Morales, and I'll pop right up and hopefully you'll find something you like. I mean, there's episodes on the what are the benefits of DIY investing? There's episodes on what are some debt strategies?

There's also me being a basic, you know, person. And you know, showing you my FabFitFun box because you know what, sometimes I can be basic and I'm, I'm not ashamed of it. Maybe I'm a little ashamed of it, but not enough to not make a video about my pet pit bull box. Oh God, I am that. I am that girl. So anyways, hopefully you can check it out and enjoy. I think I'm funny, but you tell me. That's it for me. I will see you back here tomorrow with another bonus episode. And I think you're going to really like it until tomorrow. Have a good rest of your day.