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All right. All right. And just like that we are live for a very first show. Welcome, welcome. Welcome on today’s topic that we’re going to have the discussion for is going to be about what payment history is, the importance of it, and why knowing about it is the first step in having some really good credit. So, as this introduction is just starting, I’d like to welcome you all, feel free to comment. My software allows all your comments to show up at one screen regardless whether you’re watching on LinkedIn, Facebook or YouTube. So go ahead and comment at the end, I’ll be answering all questions. But let’s get started. All right, so welcome to our first segment. Our first episode, we’re going to do this as a me a five part series. My name is Derrick Faber, and I am the Director of Education for scholar arrow credit repair. We’re going to talk mainly about payment history. And the reason we chose this first is because when you have a FICO score that you’re looking at, the percentage of that score that is payment history is 35%. So it is by far the most important part of your credit score. And I think and I feel that knowing and understanding how your credit score is made, will enable you to make a lot and better decisions, and understand as you make those decisions, how they impact everything else. So payment history will show you how you’ve paid your accounts over the length of your credit. This evidence of repayment is the primary reason why payment history makes up that 35% of your score. It’s a major factor in this calculation. And research shows that your track record of payment tends to be the strongest predictor of the likelihood that you’ll pay all your debts as agreed to. As you can imagine a lenders number one priority is your past record of paying back or not paying your loans. So imagine that you need to borrow money from somebody that you don’t know or you know very little about, or even Heck, even a family member, you are going to want to know what their track record is what their history is on what they’ve been doing, to make sure that your your risk is not that risky. And for lack of better word, you want to make sure that you’re able to give out that money, you’re able to give that loan, you’re able to extend that amount of credit, knowing that you’re going to get paid back. Now as that risk goes higher, so then does the interest. So one major thing you have to keep in mind is that if you have a history that does have some hiccups in it, so they may extend that his that credit to you. Your because it’s not great or not perfect, you’re going to be paying a higher interest rate than somebody who say is in the seven hundreds. So once you get your credit to that point, your bills are going to start to be lower, which is why this is so important. Now, the other I mean, as we’re going to show all the five different categories that FICO takes into account and getting that score, the biggest thing that I want you to understand is that they’re while they’re all separate and a different portion of what comprises your credit, it’s important to understand that they all come together and they all interact with each other each account contributes to each of these five factors. Payment History, though, at being 35% is by far the biggest one. So let me pull up my calculator and give you the exact amount of points. That this is there we go. So your credit score starts at at 300 and goes to an 850. So the total available amount of points in your credits is 550 at 35%. That means payment history takes up 192 and a half points. So 192 and a half points.
Out of that 550 means you can have almost a 500 score by just focusing on your payment history now. Obviously you’re all these other ones are going to come attribute to that. So you’re going to have higher than that. But this is a significant amount of points. Now the types of accounts that are considered for this credit history include credit cards, retail accounts, like department stores, installment loans, like car loans, finance company accounts, and then of course, your mortgage. Now, public record collection items are also going to be on this. So these types of events that may be affecting your payment history include bankruptcies, lawsuits, wage attachments, and bankruptcies is important to note will stay on your report for seven up to 10 years. So I always would encourage you to take me up on my free offer for a free consultation before you consider bankruptcy. That way, we can go over it and really make sure that it’s worth that seven years of negativity on your credit report, before you actually file for that. Now, components that are going to make up your payment history are the PayPal payment information on your credit cards, retail accounts, installment loans, mortgages, if you have any overdue or delinquent payments, those are all going to come up today, as well as in the past. The amount of money that you owe on those accounts, is also going to be shown, and the number of past due items are going to be adverse records, which of course are like bankruptcies are collections. It’s also going to show the amount of time that has passed since those delinquencies have been introduced to your your report, and the number of accounts that are being paid as agreed. So it’s not just the negative information, I don’t know why my camera decided it’s going to act up on me. But I can only control so much, right? So we’re going to just keep rolling with it. You can’t control you can control your finances. Up to a certain point that stuff happens, we get it. That’s why the Fair Credit Reporting Act was enacted was to help you understand to help you be protected so that you get Fair and Accurate Credit. Now, and this camera things really bothering me, I don’t see that I can do much more than let me go into the camera focusing and see what we can do. There we go fixed with a mouse click. So what can you do to make sure that your payment history is healthy, paying your bills on time. Now this sounds simple. And it’s easier said than done. Because life happens. And you never really know. And can plan for some of these life events, which is why they changed the law starting in July of this year, which was 18 days ago regarding medical debt, because some of these life accidents that occur or pop up that you weren’t budgeting for do affect your finances. And a sudden $50,000 payment or bill does not give an accurate representation of how you handle your finances. So make sure you pay your bills on time as much as possible. stay current on your missed miss payments, so get get up to date on them. If you have some missed payments, call the company that you’ve missed that payment with explain what’s going on. Ask him for some grace. You know, a lot of times we assume that just because we’re having some hiccups or having some mistakes or something pops up that we just have to deal with it. So many times in life, you do just have to deal with what what handier serve, but the credit card companies or anybody loan, it could be your auto loan, especially during COVID. All you really need to do is pick up the phone say hey, listen, I’m running behind. Can I get an extra week or two money super tight? What can we do?
They can make arrangements. Because you’re communicating. It’s amazing how much communication can really help you especially as an adult. So I know for a fact that the credit union here in town because I had a friend that had to do this you hate asked me about it. And I said just give them a call, see what they can do. And so he called them and said, Listen, I got laid off because of COVID I really can’t afford my car payment this month. What can we do? And they said fill out this application. There’s a $40 processing fee, and they waive the next three months worth of payments. Now, he didn’t get forgiven those payments. They just got put on pause he got to keep his car everything was just like normal. But he was able to take three months off, make sure his finances were in order so that when that turned back on, he would able to resume just like normal and he did and there was no reporting negatively on his credit. Report. Now the same thing happens with credit cards, your credit card company wants you to have a positive payment history because it takes so much of your credit score. So if you find yourself again strapped, give them a call, say, Hey, listen, this, this bill is due on the seventh or the fifth of every single month. But that’s the same time that my rent is due that my utilities are due that my car payments do. I can’t not buy groceries or have money to function. Can we move this payment date? Can you forgive me this time? And they’ll say, You know what, if we need to move that date for you, we’re happy to do that what date works for you. So then you can look at your calendar bills and say, well, if everything’s due at the beginning of the month, let’s do this on the 18th. And that way, I know that I’ve got a fresh paycheck in the bank, and that I can make sure that I’m making these payments to you on time. They want that to happen. Now we’ll get into other tips as we do more more shows. And again, if you have any questions or comments, I’m going to end this live stream with with q&a If there’s some available, or if there’s anybody asking any. But back towards the credit card thing, if if you do have the thing set up exactly how you want as far as your date, you need to make sure you understand the difference between the statement date and the due date. Now the statement date on any account is the date in which they look at the amount of debt that you have. And they post that to your statement. Well, that’s also the amount of money or debt that they that they report to the credit bureaus as far as your usage goes. So if you want to have a higher score, and this goes into next week’s talk, then you make sure you’re making your payment by that statement date. Instead, the due date. One of the first actually the first bit of homework that I give all of my new clients is to go through, I send them a worksheet to go through each of their accounts to list the account name, the percentage of interest, the current balance and the total available line of credit so that we can figure out the usage. So we can figure out how we’re going to attack this. And it’s important because a lot of times and in, especially with your finances, especially with your taxes, you’re not taught these things, and you just the mentality that most people have is, if I make this dollar amount, and I spend this dollar out, let’s just make sure that I make a little bit more than I spent, and then everything’s paid for, I really don’t have to think about it. And that’s great. And that’s awesome. If that works for you. But you’re just going to be barely floating, you’re just going to be barely getting by. I don’t want to just barely get by, I want to get ahead. So I need to know, where is my money going? How many times have you thought to yourself, I can’t afford that. There’s a good friend of mine that does some money talk, forwards investing. And he says if you could say $5 a day, could you do it? And everyone’s like, yeah, $5 a day I can handle $5 a day. And then they talk a little bit more he goes so that $150 a month, you’re gonna be able to save and we’re gonna investigate Whoa, whoa, whoa, pause $150 a month, we were talking $5 a day, not $150 a month. But if you do the math, five times 30 is $150 a month? How can you say $5 A month not go out and do extra things? How can you say $5 a month? Well, the first thing you’re going to need to do is you’re going to need to find out where your money is going. Once you get paid in, start looking at your your checking account, start looking at your bank statement, start realizing what you’re spending your money on. And then start prioritizing.
I’m not saying don’t go to Starbucks every day, if that’s what makes you happy. I’m saying be aware of when you make those purchases, that you’re putting your money into something. So when you actually honestly look someone in the eyes and say I can’t afford it, then you can realize, you know, if I really wanted to, I could cut back to maybe three or four times a day or three or four times a week going to get that Starbucks or going out to eat. That’s going to put that extra money into your account so that you can do these other things. So make sure that you understand where your money’s going so that you can pay things appropriately. If you’re running out of money at that time of the month that your bills are due call and get that your your due dates changed because they’re more than happy to work with you. We’re about halfway through. I really want to make sure that if you guys have any questions, go ahead and put them out there. If you don’t have any questions, that’s fine. Make sure you’re hitting the Like and share for me also because a lot of times people don’t realize that the logarithms on the streaming sites are geared towards your participation with me. I love that you’re watching Shooting I love it even you may watch this after this is already recording because these are gonna stay on there for a while. But make a comment, just say hi just like it, just share it whatever you’ve got to do to get other people out there to realize how they can start making better financial decisions for themselves. If we don’t have any other questions, we’re about 15 minutes in halfway through, I don’t have a lot prepared for today, just because I wanted to introduce myself, let you guys get to know me, we’ll grow. Like I said, we just went through what payment history is why it’s important, because it does make up so much of your credit score. But in the meantime, if you have any questions, you can send me a private message, you can send me a text message, you can send me an email the best way to my cell phone number. Don’t have that ready to put on the screen yet. But let’s do this. Let’s do a screenshare. And we can walk through one way that you guys can get a hold of me go to my website, Scarlet arrow.com. It’s on my hat, it’s on the sign behind me. It’s sitting here on the screen. Go to Scarlet arrow.com. If you are super interested in want more information, first consultations free, just go to the Clients tab. Once you click on the Clients tab, my drag unit will load and it just pulls up a form, I just need your first name, your last name and your email address. You can send me your cell phone because you prefer me to text you or call you that is awesome. But then just verify you’re not a robot and hit submit my information that’s as easy as it is, you can get a hold of me right away that way. So thank you, Tiffany, thank you for for for commenting, that definitely helps. If you have any questions at all. Feel free to ask them I will answer your questions about business credit, personal credit, anything that you’ve got. Also, this is going to be a regular Monday thing. Mondays at one central, I’ll be going live for at least 15 to 30 minutes, I have it scheduled for 30 minutes. That way, if people can come and go, then they’re free to do that, then we’re going to go through the five parts of the FICO score, the first five that we’re going to talk about, they’re going to talk about a bunch of other things so we can get into different tips and tricks we can get into what makes it up, we can get into staying focused on the goals that you may have. If you’re looking to buy a house, there’s very important things you need to be doing regarding your credit in the way you’re utilizing your your funds, and also not opening up new accounts so we can get into all that fun stuff. But it again, go to my website, if you have any questions. If you are somebody who has people you’d like to refer, all you got to do is go to my affiliate link at the top of the screen also sign up as an affiliate, it’s a similar form. But this will give you access to the screen of being able to look and see if everybody you’ve that you’ve recommended as far as their progress. Also, everything that I do is fully transparent. I want to make sure that everybody knows what’s going on with them with each other. So it doesn’t look like we have a lot of questions. We’re starting to wrap up. So yeah, I mean all right. I guess like could be adding Tiffany’s comment to the screen silly me neglected that. But
all right. So make sure you guys understand how your credit works, make these decisions that you are and may rewind a little bit, got kids playing upstairs a little distracting, and I apologize for that. But hey, as the school year starts, then you’re gonna have my total attention. Now, when you make your decisions, and when I’m coaching people, and when I’m wanting to give this advice. If you’re already strapped, then the first thing you think of is I can’t afford to do this. That’s the first thing I want to do. I want to break that ice. I want to explain to you that I’ve not my goal is not to create new bills. My goal is not to put you into a tighter money crunch. My goal is to help free you from the shackles of being bound to your finances. Don’t be a slave to your finances. When we go through and we look at what you’re doing, how you’re spending your money. It’s not for me to tell you what to do. It’s literally for me to help you see what you’re already doing, to see what we can change for you so that you can free up that money. I don’t want to create new bills for you. I want you to divert some of that money to things you’re already paying for. And then using those things to pay your credit, we can do your cell phone bill, we can do your utilities, rent, all kinds of things and bills that you’re currently paying for right now can be building your credit. And that’s what I want to show people how to do. So your payment history is super important. It’s going to give that bigger picture to whoever the lender is that you’re going to be looking for. And don’t. And another funny thing and not funny, but another thing that gets brought up all the time to me is as well, I don’t need my credit right now. Because I, I’m not looking at moving anytime soon, my car’s fine. I just don’t need it. Well, when you do need it, are you going to be ready for it, it’s not something you can just flip the button on. And all of a sudden, magically, it shoots up 100 and some odd points and you can use it immediately. It takes time. So let’s get it built up now. So that when the time comes, you do need it, you’re ready for it. And you’ve got that history showing that you are very credit worthy. For those that are looking for it. So all right, well, if anybody has any questions, throw them out there now. If not, we’re going to end this. I hope you guys have a great week as if any of you have watched me before. I’ve been doing live streams now for three years. Most of them have been very business targeted when I was doing a lot more of E commerce and coaching different business owners. I always in my podcasts or my live streams the same way and I’m going to continue to do that. God loves you and so do ye. And I hope you have a great week. So until next week, you guys have a great one. We’ll talk to you then.