Rebuilding Credit In 2022 - YouTube
https://www.youtube.com/watch?v=ZYVtLU4PgyU

Transcript:
(00:03) [Music] what's up youtube welcome back to the wallet monkey channel where we give you all the credit intel you need to grow your wallet today what we're going to talk about is what what would you do and how would you rebuild credit right meaning that you've got some derogatories you've got some baddies on your report what do you do okay and i'm going to use a piece that we actually never published as a starting point uh and a jumping off point for this conversation and so this which you see here this perfect credit
(00:33) formula is based on this book right here which you should probably go and pick up uh if you haven't already it's this guy who worked uh in the credit uh bureau system i think uh this uh anthony davenport i think he worked there for you know a sizable amount of time and his his reference points and his his data or expertise comes from him helping tons of people that came over to the united states as uh foreigners and so they were brand new to building credit getting a social security number all those things so migrating over legally
(01:06) um high net worth individuals who've got a ton of cash and they've got no credit whatsoever you know so maybe like uh athlete or somebody who suddenly comes into a lot of money um that doesn't have a credit score or they've got a really really bad credit score and that is his reference point that he wrote that book based off of so uh anyways the book what it boils down to is like this 90-day formula for perfect credit so 90 days to get you to a 740 or higher and all it was was simple open four
(01:36) cards at the start of the uh 90-day period two authorized users and two secured cards now if you did to authorize user accounts first then usually you would see that that bumped up your score and then you might even be able to get two unsecured cards doesn't really matter now that is for somebody building a brand new credit but we can take something from that and we can apply that to rebuilding credit because what has happened with a let's call it bad or broken credit file right is what's happened is you've broken
(02:09) trust at the banks you've uh displayed and shown that you're not trustworthy with them with the money that they've given you that they've they've lended you right so you're late on payments uh maybe you've got a collection maybe you've got a bankruptcy all of that shows them that they can't trust you essentially so what is the one thing that we need to now do the exact opposite and uh build trust back is we need to have credit history on our pro on our account on our profile uh as as quick as possible right
(02:41) that's why i why i say that is because i think aus are still insanely valuable for uh they're insanely valuable for building credit and rebuilding credit so getting put on au's would be a huge step forward also too getting yourself set up with some secured cards that are bigger like at least a thousand dollars right this 250 500 stuff it's just not worth it you might as well just go with a credit one or you know an open sky at that point right it just doesn't really make sense so pick those wisely that's what i'm saying
(03:14) and try and get into ecosystems that you really want to get into like the end rewards card at navy fed would be a great one because it secures up in as little as three months and then you're able to get access to a bunch of other product offerings within that ecosystem right yeah anyway there's plenty of others that graduate up but i would say at least a thousand dollars on those two secured cards and i would say to get at least two secured cards for somebody who's rebuilding credit just like somebody's got brand
(03:42) new credit so this formula i think works really really well for both instances and getting the au's now what i'd be doing simultaneously if i was rebuilding is i would either learn the uh you know learn the code yourself the credit law and consumer protection law yourself and then you start to craft your own letters and means of getting inquiries deleted and collections deleted or you're gonna have to hire somebody else and that's where a ton of time can be wasted and a ton of money can be wasted
(04:12) that's why one of the first questions i asked somebody when it comes to rebuilding credit is how much money you got because we need to put money towards two things getting um buying au's setting up uh secured credit cards and getting rid of the bad stuff on our report now understand that you know outside of these two uh this one you can do yourself this one you can do through time uh sweat grit and tenacity right is just going in there researching and then you going out and you know doing the um the letter mailings
(04:44) yourself instead of having somebody else do it right and so you could do that or hire somebody to do it and have them attack the inquiries uh the collections and getting those things removed and you know with the bankruptcy those uh those take longer to get removed so it might never get removed but in the meantime you've at least removed everything else and you've positioned yourself with this new credit that you're going to get into ecosystems that will allow you to grow and the the reason why i bring up the navy fed thing
(05:12) so much is because their internal score and and the data points that you build with them matters more than your credit score so you will get to a point where your history with them matters more than this little bankruptcy that's that's on the you know that's on the credit file right so that's why it's worthwhile to do something like that whereas what i see a lot of people doing is uh with rebuilding credit i think they just do it all wrong right like the first thing they want to do is they go out and and i
(05:40) did the same is uh i got my jewelry club new new coast direct um and i i wanted to get all this store credit stuff because no no hard pull well those were hard pulls but um they'll report to you know um they'll report to all three at the time and they will they will um approve everyone so it was guaranteed to prove them so i was thinking that was a good idea those trade lines however look like crap and those aren't even around anymore so you don't even have those options so there's all these fintechs that allow
(06:10) you to connect your bank account do direct deposit stuff yeah i think those are really really good grow credit is another one that i'd look into um you set up your bank account you connect your checking account and then you would just pay for subscription services that you already pay for you don't we're assuming you don't have credit uh credit cards anyways that you would put those purchases on so it makes sense that you know you rebuild there because uh with something like that you can see upwards
(06:33) of a 50 point jump now navy fed i go in that way three months later i get the end secured it pivots into an unsecured card and then i can start to look at like the pledge loan product right which would then start reporting as an installment loan i paid that thing down 90 to 93 immediately um and that's reporting as a uh active trade line with hopefully a good size balance on it so this helps rebuild my score and i'm building my internal score with navy fed at the same time so that's why it's just
(07:02) like i think people get the wrong ideas they go after the the merricks and the credit wands and the indigo and all the dog that they show you on experian when you log out um and under the recommendations section uh wallet hub shows you this and so does credit karma it's all the same junk and that's why also too these are the same people that are getting into you know these predatory personal loans where you got to put up your car and all this other weird stuff with like one financial and places like that is because they're
(07:27) desperate so they're not thinking clearly and they're like trying to erase all this history and pass like in 15 minutes so it's like i you know i just want to know i want to know so it's like this weird combination of impulsiveness that leads them to to go to like these stuff our lenders desperation uh maybe now all of a sudden too they need money so they want to fix it in like two months and because they need money for something so this is a long-term game we have to start looking at this with a long-term strategy
(07:57) and if you find yourself in this mess then it's going to take you some time to build to get out of it like me i didn't really have the the other thing i would say is i didn't have the information so if you don't have information in beginning it's like money and information and or education and whatever you want to call it right knowledge and so i was missing uh both of those things when i first started right so it took me way longer to do than it was probably necessary and i kept finding myself the reason why the money
(08:23) thing kept coming into play is because i kept paying for services trying to find good services to fix the credit and i just kept losing money kept losing money kept losing money because as soon as you send these guys money you know you'll never get back so whether they're good or not once you've sent the money it doesn't really matter like the money's gone so you know i found myself can you know consistently uh churning through money uh thousands of dollars at a time to pay for you know people to um
(08:49) fix my credit and they just weren't fixing it right and then finally got one that was i would say okay and then um over a span of a year another year after that it took them to get everything removed and then you know finally because i had a bankruptcy before from way back in i don't know 2011 something like that um then finally that just fell off it just fell off on its own they couldn't even get that removed it just fell off on its own so anyway my point is is that you can get really obsessed trying to
(09:19) clean it all first and make it look really good you can get really obsessed with spending money in the wrong and time and focus in the wrong areas credit ones mavericks indiegogo you know store store cards all this stuff that's junk that's not going to get you to what you actually want well we want high limit cards at great institutions that are widely accepted so we're not getting bent over on fees we're not getting bent over on you know usage or any of that right and hopefully it's coming with some sort of signup bonus
(09:48) that we can tap into at some point so i think that's it like that's the big trick is that one most people are focusing on the wrong things they're not getting a clear understanding of what they're up against timeline to get through that and and then putting their focus in the the areas that'll matter to rebuild into the ecosystems right so whether it's navy fed or pen fed um pretty similar scenarios right pretty similar institutions and you can build out into those ecosystems or picking another credit union that you
(10:19) know does similar um and then picking out a couple of bigger institutions that you could do similar you can open up checking accounts you can open up high yield savings accounts and start to build that history even though you've got all this stuff on your credit report like it would actually make more sense for you to just leave the credit report alone don't try and clean it up at all and just go do these other steps instead that would be more valuable use of your time and your money because in a time that it would take you
(10:45) to go and establish these relationships over here you might not have even had any progress over there trying to pay to get this stuff removed et cetera right and once you get all that removed you would then just be right back over here so if anything you should be starting both at the same time getting your feet into the door because you know all these accounts gotta season up for three six months anyways you gotta be showing direct deposits that we can get the the history with them right so that should be happening while simultaneously we're
(11:11) trying to go and learn over here and correct uh and they make this cleaned up over there so anyways i hope that helps if you are in the rebuilding credit phase uh that's the way i'd be looking at it that's the way i would suggest you to look at it is building out both of those so that three to six months from now we've got progress over here progress over there and even if nothing's changed over here we got something over here that we can now get into other products right in that ecosystem making this not matter so
(11:40) much anymore so there you have it my friends uh if you've got questions comment below or if you think i missed something comment below or just for the algorithms uh hit the like button and then uh subscribe if you're brand new here and uh hit the bell notification bell more videos coming soon [Music] you