Being in this industry for over 27 years I have come to see and learn a LOT as it pertains to the inner workings of this space but also how consumers react as a result.
There are so many myths and misconceptions that revolve around the credit, funding and financial monopoly that the lies are louder than the truths and as a result, people with money and people with limited resources are taken advantage of from many angles.
In this piece I am going to highlight a 4 of the Most Common Falsehoods (MCF) I encounter on a regular basis. I will highlight more in the future, but I chose to start with these four.
MCF #1: You Have To Wait 7+ Years To Rebuild Your Personal Credit
This is a myth that I hear often. People that follow me or those that even know me (and know what I do) will wait years to reach out to me for help. Because they’ve heard “somewhere” that they cannot rebound from a bad credit report prior to year 7. I have had conversations with people who have said: “I have been following you for years. I was just waiting out the time to reach out to you.”
Let me say this clearly…you DO NOT have to suffer with poor credit for years!!! Creditors who report this data can do so for years but there are ways that are within your consumer rights to have this information removed from your credit file years ahead of time. This is why a consultation or an on-boarding call is done with you. To go over your file in detail so you know exactly what can be done on your file.
So many people are embarrassed by poor credit scores. I am here to tell you, there is NO reason for shame. Bad things happen to good people and in the unstable economy we currently live in, it is possible that you may have some dings on your credit file. There is no need to run from it. With the right program, tools and education…you can rebound in no time to excellent credit!
MCF #2: Bankruptcy Is A Bad Word & It Takes 7-10 To Bounce Back From A BK
When I tell you sooooo many people are drowning financially because they are afraid of the “B” word in credit!! Literally people are over their heads in debt and cannot see their way out. Because of this fallacy that has run rampant in the consumer credit community…folks will beat themselves up fiscally instead of seeking out help with a bankruptcy.
►Here’s a little secret: wealthy people use bankruptcy ALL THE TIME as a tool to relieve themselves from mounds of uncontrollable debt!!
► It’s a consumer tool that is YOUR RIGHT to use if and/or when it is needed to find financial relief.
The best news you can gather from this is…you can begin rebuilding your credit the day after your bankruptcy is discharged. So many of my clients have gone on to buy real estate, become investors and more after filing for bankruptcy.
Another bit of good news is, you CAN have bankruptcies removed from your credit profile! Legally it should not be there in the first place. I can teach you all about that (if you want some consumer truths and facts).
I say all this to say, if you are overwhelmed with debt…paying a lot of bills, putting money on credit cards to keep from defaulting (and dropping your credit scores) only to not have enough money for your day to day living expenses…you just may be a good candidate for this tool called bankruptcy. If it’s good for rich people, trust it is definitely good for those who are not wealthy!!
If you have already filed a bankruptcy and its been discharged…reach out to me or someone on my team. We can guide you on the removal and credit rebuilding process.
MCF #3: If A Car Dealership Tells Me To Put Money Down To Buy A Car I Have To
A lot of people don’t know about this big lie!!
In 1968, the government passed the Truth In Lending Act which is required to give clear details for any loan a consumer partakes in. Car dealerships have been getting away with not being truthful as it pertains to down payments for decades and still are to this day.
Let me say this…when I advise someone on buying a car, I tell them to go to their credit union (like Navy Federal) or their bank. Apply for a car loan. Once the loan is approved, the bank or credit union gives you a check for your approved amount…NEVER once do they ask you for a down payment!! You then take that check and go buy a car. The dealership provides the VIN number to the bank so a lien is placed on the car should you default. That’s it!
I have had clients tell me they put down $5K – $10K to purchase a vehicle. In addition to the 20+ inquiries on their credit report they incur from the dealership shotgunning their credit to multiple banks, this is a mess in the making! Do you know who gets taken advantage of the most in this process? Yep…people with poor credit. “If you have a job then you can drive today” marketing is powerful.
► Here’s a hint: When you go into a dealership and you focus on the monthly payment more than the interest rate…they already know your credit is jacked up! So, if you tell your salesperson: “keep my payments at $600 monthly“, they will do just that! They will put you in a 10 year old car with high mileage and 21% (legal) loan shark interest rate!! But hey…your payment is $595.00 monthly…they got you what you asked for with a $5K down payment!! It’s absurd!!! 😡
But just so you know…for your own edification…when you put money down to buy a car, that money is going to the dealership. The F & I manager, the salesperson, etc. They are making a spread on the deal because you didn’t know your rights and in most cases, because your credit was horrible. As I noted above, if a bank approves you…all you need is the check to go buy a vehicle. Unless you go over that amount on the check, you should NOT be coming out of your pocket with any money (maybe for taxes, title, registration, etc.)!! But if you stay in the parameters of that check, you should be ok with no out of pocket money!
My daughter purchased a new vehicle and did exactly as I outlined. The first dealership kept telling her they STILL needed to run her credit. She told the guy “no she doesn’t”. He said “its their policy.” Needless to say, they lost a sale.
The reason he wanted to run her credit was so he could shop her file around and see where he could get more money for himself on the deal. It was no benefit to my daughter. Because I have an educated consumer as a child…she knew better and took her check and her business elsewhere and got the vehicle she wanted without the nonsense that place was trying to put her through.
Just So You Know…
If you have paid money towards a down payment (in recent months to a year), you can reach out to the dealership in writing, note the TILA (truth in lending act) and how you were not properly informed on how that down payment was to be used and to request a refund!
Why put that money down if it’s not going to reduce your loan balance?? You can keep the money and then make your payments on the car instead. This is just information that consumers need to know about prior to taking action and wasting money.
Understand that credit unions are more lenient on credit scores so if your credit needs work, do that first. If you are in a situation where you desperately need a car…then you will unfortunately fall victim to those “buy here pay here” type dealerships or those that use your job as your credit. But nonetheless, they need to be disclosing exactly what your down payment is being used for.
MCF #4: You Need A Certain Credit Score To Buy A Home
Contrary to popular belief, you don’t need to go the traditional route to purchase a home or to invest in real estate.
In this country if you have one of or more of the three “C’s“, you can access assets. Those 3 C’s are: Cash, Credit or Collateral. Because I know most people don’t have cash or collateral…I teach them how to leverage credit to access what they need to advance in life financially.
But did you know, there are unconventional ways to access major purchases without credit??!!
►We teach you how to do that using cash or collateral.
►We show home sellers how to become the bank.
►We teach home buyers how to buy homes NOW regardless of credit.
Yes you will need a down payment (in this instance…10-20% on average). Similar to a conventional loan. I know FHA is big for people looking to purchase a home. Honestly…It’s like the section 8 of home ownership (because the government is all in your business) and in addition, it comes with a monthly fee called PMI (private mortgage insurance), which insures they get their money if you fail to pay. This does not go away for many years because the first 10 years of payments alone will be all interest. The next 10 years of mortgage payments goes towards some of the principle so to get rid of PMI insurance, you have to get your mortgage balance below 80%. That’s going to take 10-15 years (at least)!! So if you are paying a few hundred dollars monthly for this insurance…they are making a hefty profit on…including the interest.
Now, if home-ownership is your goal and you cannot afford the 10-20% down, then there are ways to weigh your options. FHA is a good tool but just know, you have other options available to you that don’t include the rules and extra fees associated with an FHA loan. I believe that if the home is the collateral, then why does a credit score even matter?? If the person fails to pay, then the bank will come retrieve the home…REGARDLESS!! This is how the system controls who can own and who cannot as if ALL people don’t need a place to live! If you are paying high rent, you can afford to buy a home (if that is your goal)!
Just know if you want to learn what options are available to you…reach out to me and I will let you know your options even with a bad credit score. Because if you are working…chances are you can afford a home!!
In Closing…
As I noted in the beginning, I am just highlighting 4 Most Common Falsehoods in the credit, funding and financial space today. I will bring more in the future. I just wanted to touch on a few things to bring awareness and eliminate the shame that can sometimes rest around poor credit while also letting people know that they can still accomplish goals of home ownership and more even with bad credit.
► For more information, visit me online to schedule a consultation at: www.CreditLady.info
Prosperously Yours
