Credit Education

Your #CREDIT Is NOT Your Credit SCORE. Your Credit Is Your Credibility/Reputation With The Banks 🏦

If You DO NOT HAVE Good Payment History, Or If You Have Collections, Charge Offs, Repos, Rental Agreements, Evictions, Bankruptcies, Auto Loans, Medical Bills, Inquiries, Child Support, Student Loans, Late Payments Etc; Then YOU HAVE NO CREDIBILITY 🥴

Just Like A Resume Your Credit Score Makes You Qualified To APPLY. Example: You Must Have A 650 Credit Score To Apply For This Apartment. 50 People Can Have A 650 Credit Score Why Should They Choose You?

The Application To Whatever You're Applying For Is The INTERVIEW & A lot Of Yall Fail This Test.

Obviously When Applying For Things The Amount Of Money You Make, The Amount Of Debt You Have, The Job You Have, All Plays A Factor In Your Approval. But What Many Don't Know Is Can Have 700+ Credit Score And Not A Collection In Sight. Your Personal Information Can Be All Messed Up.

Credit Repair DOES NOT Boost Your Score ‼️ The Only Person That Can Increase Your Credit Score Is YOU.

So If You Want A Higher Credit Score You First Need To Know What Makes Up Your Credit Score? These Are Called #The5Factors

1. Payment History (35%)

The most important factor. Do you pay your bills on time?

2. Amounts Owed / Utilization (30%)

How much debt do you have compared to your available credit?

3. Length of Credit History (15%)

How long have your credit accounts been open?

4. Credit Mix (10%)

Do you have different types of credit (credit cards, auto loans, mortgages)?

5. New Credit (10%)

How many new accounts have you recently opened?

The Purpose Of Credit Repair Is To Hide The Negative Items From Your Report So That They No Longer Hold You Back. So Now You Can Get Approved For Things But You Do Still Owe The Original Creditor. But It DOES NOT MEAN THE DEBT IS DELETED.

So Why Not Just Pay It?

• 9/10 If You Have A Collection Your Information Has Been Passed On To A 3rd Party Debt Collector That You NEVER Did Business With So Therefore You DO NOT OWE THEM ‼️
• Every State Has A Statue Limitation On When A Creditor Can Collect On A Debt 💸 A lot Of Times Consumers Don't Realize That They Almost Are Scott Free Of Paying A Debt But When They Pay A Small Payment THE CLOCK STARTS OVER
• If You Pay Them It Will Be Harder To Get Removed Because Why Would Anyone Pay A Debt That Doesn't Belong To Them. So You Look Guilty
• Paying Them DOES NOT REMOVE IT FROM YOUR CREDIT REPORT
• If You Pay Them In Full It Will Show Up As A PAID COLLECTION
• If You Fall For That Letter Saying Pay 30-40% Off It Will Say SETTLED FOR LESS THAN FULL BALANCE

The Smart Approach:

• If You're Ever Behind On an OPEN ACCOUNT Yes it is safe to get on a payment plan etc to pay it down
• But if that account has ALREADY BEEN CLOSED & SENT TO COLLECTIONS It's better to get it removed FIRST & Then Settle The Debt
• Because If You Settle First, It Will Still Be On Your Credit Report And That Doesn't Help You

The Ideal Utilization That You Want To Have In Order To See Your Score Improve Or Get Approved For Anything Is 10% Or Less. With 30% Is The MAX Amount You Should Ever Spend While Using A Personal Credit Card.

Example:

$1,000 Credit Limit
$800 Balance
= 80% Utilization (TOO HIGH!)

Now Even Though It'll Be Smarter To Keep My Utilization Under 10% A lot Of Times 10% Isn't Enough So In Reality I Get UP TO 30%.

The Rules:

• Below 10%: Your score will INCREASE
• 11-30%: You will MAINTAIN your current score
• 31% or Higher: Your score will DROP

In Conclusion: If You Have A $1,000 Credit Card 💳 30% = $300. THAT'S THE MAX YOU SHOULD EVER SPEND. If You Spend $301 Your Score Will Drop Because Now You're Utilizing Too Much Money.

Type 1: Pay After Every Purchase

Your Balance Is Always Low (Example: Balance Only $36.08)

Type 2: Let It Build Up Then Pay

Some prefer this method because they like seeing the money in their actual account than on the card.

At The End Of The Day There Is NO RIGHT OR WRONG ANSWER. However If You Are Going To Be A Type 2 Kind Of Person You Need To Know How To Do It Correctly.

Payment Strategies:

Pay In Full	Pay To 10%	Pay To 30%	Pay Minimum Balance
Preferably Plan A	Plan B	Plan C	Plan D

Statement Date Vs Due Date

Must Make Minimum Payment By The Due Date

Example:

• $300 Credit Card Limit
• You Spent $90 (This Is How Much You Owe)
• Your Utilization Is 30%
• Your Statement Date Is December 9th
• Your Due Date Is December 14th

Revolving Credit - Credit Cards 💳

Revolving Accounts that would generally have a different amount due each month depending on the current balance. The full balance is not required to be paid in order to keep the account in good standing. Interest is accumulated each month that a balance is carried over into the following month.

Installment Credit

• Auto Loan
• Mortgage Loan
• Student Loans
• Personal Loans
• Secured Loans

Open Credit

• Utilities
• Phone Bill
• Rent

Primary Account vs Authorized User

Primary Account	Authorized User
You are the owner of the account. You have full responsibility of everything that comes with the account.	A primary account holder has the option to add an authorized user to their account. They can use the card but the responsibility and owner of the account is the primary account owner.

Different Types Of Revolving Accounts

Installment Accounts

• Accounts with a fixed monthly payment for a fixed period of time.

• Interest could be fixed or variable.

Examples: Auto Loans, Mortgage Loans, Student Loans, Credit Builder Loans, Personal Loans

Consumer CU

• Good For Auto Loans
• Anyone Can Join
• Interest rates as low as 5%
• Also Fund You Up To 100% Of The Car's Book Value
• Loan Terms Up To 84 Months

Alliant

Great general-purpose credit union with competitive rates

DCU (Digital Federal Credit Union)

• Good For Auto-loans
• Anyone can join
• Interest rates as low as 5.74%
• Also Fund You Up To 130% Of The Car's Book Value
• Have 84 Month Terms
• A Delayed Payment For 60 Days

PenFed CU (Pentagon Federal Credit Union)

• Good For Auto Loans
• Rates As Low As 4.49%
• Can Finance Up To 125% Of The Car's Book Value
• Also Can Get A Pre-Qualification Before Getting The Approval
• Meaning You Don't Have To Get A Hard Inquiry

A hard inquiry (also called a hard pull) is when a lender checks your credit report because you applied for credit.

Hard inquiries happen when you apply for things like:

• Credit cards
• Auto loans
• Mortgages
• Personal loans
• Apartment rentals or utilities

Why hard inquiries matter

• They can lower your credit score by a few points (usually 3–10 points per inquiry)
• They stay on your credit report for 2 years
• If you have more than 2 hard inquiries per credit bureau your goal should be to remove all other inquiries not attached to open accounts

A collection account is a negative credit item that appears when a bill goes unpaid for a long period and the original creditor sends or sells the debt to a collection agency.

Common types of collection accounts

• Credit cards
• Medical bills
• Utility bills
• Phone/cable/internet bills
• Auto loan deficiencies
• Apartment or rental balances

Why collections are serious

• They can drop your score 50–150+ points
• They stay on your credit report for 7 years from the first missed payment

Paid vs. unpaid collections

• Unpaid collections obviously will still hurt your score, BUT Paying a collection does NOT guarantee removal
• Paid collection → Settled for less than full balance, A collection is still a collection at the end of the day and needs to be removed from your profile. If you get out of jail for robbery even though you did your time will jobs still look at you sideways?

A late payment on a credit report is a negative mark that shows you didn't pay a credit account on time according to the lender's due date.

How late payments are reported

Creditors don't usually report a payment as late until it passes certain thresholds:

Typical reporting stages:

• 30 days late – first level of damage
• 60 days late – more serious
• 90 days late – major red flag
• 120+ days late – often leads to collections or charge-off

How late payments affect your credit scores

Account Type	Days Late	Estimated Drop
🚗 Auto Loans	30 Days Late	−40 to −80 points
	60 Days Late	−70 to −120 points
	90+ Days Late	−90 to −150+ points
🏠 Mortgage Loans	30 Days Late	−60 to −110 points
	60 Days Late	−90 to −160 points
	90+ Days Late	−110 to −200+ points
🎓 Student Loans	30 Days Late	−30 to −70 points
	60 Days Late	−60 to −110 points
	90+ Days Late	−80 to −150+ points
💳 Credit Cards	30 Days Late	−50 to −110 points
	60 Days Late	−80 to −140 points
	90+ Days Late	−100 to −180+ points
📦 Collections	New Collections	−80 to −150+ points
📦 Collections	Multiple Collections	−150 to −250+ points
❌ Charge-Off	Often follows 120–180 days late	−100 to −200+ points
🏚️ Foreclosure	One of the most severe credit events	−150 to −300+ points
⚖️ Bankruptcy	Chapter 7	−200 to −350+ points
⚖️ Bankruptcy	Chapter 13	−150 to −250+ points

A student loan is borrowed money used to pay for education that you must repay—with interest—after (and sometimes during) school.

🏦 The 2 Main Types of Student Loans

⏳ When Do You Start Paying Them Back?

• Usually 6 months after leaving school (grace period)
• Interest may build while you're still in school
• Payments can last 10–25+ years if not managed properly

📉 How Student Loans Affect Credit

Student loans:

• Appear as installment loans
• Can help credit if paid on time

An eviction is a legal process where a landlord forces a tenant to move out of a rental property—usually because the tenant violated the lease or failed to pay rent.

🏠 Common Reasons Evictions Happen

• Non-payment of rent (most common)
• Repeated late payments
• Violating lease terms (unauthorized occupants, pets, damage)
• Illegal activity
• Staying after the lease ends (holdover tenant)

⚖️ How the Eviction Process Works (Simple Version)

1. Notice is given (Pay rent, fix the issue, or leave by a certain date)
2. Court filing If the issue isn't resolved, the landlord files an eviction case
3. Court judgment A judge decides whether the tenant must leave
4. Physical removal (if necessary) Law enforcement may remove the tenant if they don't leave voluntarily

📄 Eviction vs Eviction Filing (Important Difference)

• Eviction notice → ⚠️ Warning (not on your record)
• Eviction filing → ⚠️ Court case (can show up in tenant screenings)
• Eviction judgment → ❌ The real damage (harder to remove)

Even dismissed cases can still hurt rental approvals.

⏳ How Long an Eviction Stays on Record

• Tenant screening reports: 7 years
• Court records: varies by state
• Collections tied to eviction: 7 years

That's why evictions hurt housing approvals more than credit cards do.

A medical bill is a charge you receive for healthcare services that were provided to you—but not fully paid for by insurance (or not insured at all).

Medical bills can include charges for:

• Doctor visits
• Emergency room visits
• Hospital stays
• Surgeries
• Ambulance rides
• Lab work & imaging (X-rays, MRIs, blood tests)
• Prescriptions
• Mental health services

What happens if a medical bill isn't paid

• Late fees may apply
• It can be sent to collections
• It can appear on your credit report if:
  • It's over $500, and
  • It's unpaid for 12+ months

A charge-off account is a debt that a lender has decided is unlikely to be collected, so they mark it as a loss in their accounting—but you still owe the money.

How a charge-off happens (simple timeline)

1. You miss payments (usually 120–180 days late)
2. The lender gives up trying to collect
3. They charge off the account as a loss
4. The debt may:
   • Stay with the original lender, or
   • Be sold to a collection agency

Important truths about charge-offs

• Not forgiven – you still legally owe the debt
• Not the same as a collection, but they often come together
• Very negative on your credit
• Can stay on your credit report for 7 years from first delinquency

A repossession (often called a repo) happens when a lender takes back property you're financing—most commonly a car—because payments weren't made as agreed.

How a repossession happens (simple timeline)

1. You finance a vehicle (or other property)
2. You miss payments (often 60–90 days late, varies by state & contract)
3. The lender declares default
4. The vehicle is repossessed (often without warning)
5. The lender may:
   • Sell the vehicle at auction
   • Bill you for the remaining balance (deficiency balance)

Important things to know

• Repossession does NOT erase the debt
• It's a major negative on your credit
• It can stay on your credit report for 7 years from the first missed payment
• You may still owe money after the car is taken

Deficiency balance (very important)

If you owed $18,000 and the car sells for $11,000:

• $7,000 = deficiency balance
• Plus fees (towing, storage, auction costs)
• That balance can be sent to collections or charged off

Voluntary vs involuntary repossession

• Voluntary repo: You turn in the vehicle
• Involuntary repo: The lender takes it

A bankruptcy is a legal process that gives a person or business relief from overwhelming debt when they can no longer afford to pay what they owe.

90%+ of personal bankruptcies are either:

• Chapter 7
• Chapter 13

Everything else is rare and situational.

💳 Debts That DO Get Wiped Out (Usually)

These are called dischargeable debts:

• Credit cards
• Medical bills
• Personal loans
• Payday loans
• Collections & charge-offs
• Old utility bills
• Certain business debts

🚫 Debts That DO NOT Get Wiped Out (Usually)

These survive bankruptcy:

• Child support & alimony
• Most student loans
• Recent income taxes
• Court fines & criminal restitution
• Debts from fraud
• Most government-backed loans

Key things people misunderstand

• Paying a public record like bankruptcy for example does not automatically remove it from your credit report
• It doesn't disappear because it's old (until time limits expire)
• Removing it often requires legal accuracy disputes or completion
• Just because your bankruptcy has been Dismissed or discharged doesn't mean it will not report on your credit report

A public record on a credit report is a negative legal or financial event that comes from court filings or government records and is reported to the credit bureaus because it involves unpaid obligations or legal responsibility.

Historically, these included:

• Bankruptcy (Chapter 7, 11, 13) ✅ still reported
• Judgments (court-ordered debts)
• Tax liens (unpaid federal or state taxes)
• Civil lawsuits
• Evictions

How public records affect your credit

• Considered major derogatory items
• Can cause large score drops (100+ points)
• Signal high risk to lenders
• Stay on your credit report for a long time

How long public records stay on your credit

• Chapter 7 bankruptcy: 10 years
• Chapter 13 bankruptcy: 7 years (sometimes sooner if completed early)
• Other public records: Usually not reported anymore, but still legally valid elsewhere

Key things people misunderstand

• Paying a public record like bankruptcy for example does not automatically remove it
• It doesn't disappear because it's old (until time limits expire)
• Removing it often requires legal accuracy disputes or completion

ChexSystems is a consumer reporting agency that banks and credit unions use to decide whether to approve or deny you for checking and savings accounts.

It's like a credit report—but for bank accounts, not loans or credit cards.

What ChexSystems tracks

ChexSystems collects information about negative banking activity, including:

• Unpaid overdrafts
• Negative balances left unpaid
• Account closures for cause
• Suspected fraud
• Excessive bounced checks
• Abandoned accounts with balances owed

It does NOT track credit cards, loans, or credit scores.

How it affects you

If you have negative info in ChexSystems, banks may:

• Deny you a checking or savings account
• You can NEVER Get a business loan while In chexsystems
• Require a second-chance account
• Limit features (no overdraft, no checks)
• Charge higher fees
• Won't qualify for pay in four options like Afterpay, Klarna, Acima, Zip, Affirm, PayPal Etc

How long ChexSystems stays on your record

• Most negative items stay up to 5 years
• Even small amounts (like $50–$200) can block approvals
• Paying the debt does not automatically remove it

What People Don't Realize

If you are in chexsystems or early warning then that means that you have been violated. Read 15 USC 6802- 15 USC 6805. If you read your terms and conditions and privacy agreements of your credit card accounts banking information it tells you that they do not share your personal information with any 3rd party non affiliate….

What we don't realize it when we open up these accounts we have the option to opt out so they don't share our information but they don't out right tell us that in plain English either. But in there privacy agreements and terms and conditions it states that they don't but yet they do anyway which is a violation.

Early Warning Services (often just called Early Warning or EWS) is a consumer reporting agency used by banks to decide whether to approve you for checking and savings accounts and to monitor for fraud.

It's similar to ChexSystems—but more powerful—and is heavily used by major banks.

What Early Warning tracks

Early Warning Services collects:

• Bank account openings & closures
• Unpaid negative balances
• Overdraft abuse
• Suspected fraud or identity risk
• Transaction behavior patterns
• Zelle-related activity
• Account misuse flags

Unlike ChexSystems, Early Warning is often real-time and behavior-based.

Many top U.S. banks rely on Early Warning, including:

• Chase
• Bank of America
• Wells Fargo
• Capital One
• PNC

If Early Warning flags you:

• You may be denied instantly
• No explanation from the bank
• Even "second-chance" accounts may be blocked
• Zelle can be restricted or shut down

How long Early Warning stays on your record

• Typically up to 5 years
• Fraud-related flags may last longer
• Paying a balance does not guarantee removal

Debt consolidation is a financial strategy where you combine multiple debts into one single payment, usually with the goal of lowering your interest rate, reducing your monthly payment, or simplifying your finances.

Why people do it (what's advertised)

• One payment instead of many
• Lower interest rate (sometimes)
• Easier to stay organized
• Can help cash flow each month

Important downsides to know

• Does NOT erase debt — you still owe it
• Can hurt your credit if mismanaged
• Some options require good credit
• Risky if you rack up new debt afterward
• Secured options (like home equity) put assets at risk

So whenever you apply for debt consolidation essentially all they will do is combine all of your debt into one big debt right? Now tell me what's stopping you from doing this yourself?

Then they will give you a monthly fee. And in most cases, debt consolidation does include interest. So you just made your debt even bigger.

And to make matters worse — when it's all said and done any open accounts you had will be closed. And that doesn't benefit you at all.