#45 Let's Talk Credit Repair with Mia Prather of The Credit Vixen

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Welcome to this week's episode of the Working Moms of San Antonio podcast. We are here with Mia, of The Credit Vixen, and I'm going to turn it over to her just to briefly introduce herself and talk about her work.

Hi. Thank you so much for having me on. So again, like you said, my name is Mia Prather, and I started The Credit Vixen 1 year ago this month.

Wow. That's so exciting. Congratulations.

Thank you.

So it came from— I've been in the mortgage industry for about 20 years, And during that time, educating people on their finances, how to get into a home, it just was really resonated with me just because when I bought my first home, it was a terrible experience. And this was prior to 2008. And just everything that I went through, I was like, how are people taking advantage like this?

Yeah.

And so that's what got me into the industry to begin with. And then the, as I listened to my clients and they were telling me the horrors that they were having with their credit, and some that went through companies that they paid thousands of dollars and nothing ever happened, or they had no idea what was going on, no communication. And again, communication is key in our financial industry, you know, with realtors and lenders and all our third parties, that we all have to know what's going on within the transaction. They weren't getting that. And so I started doing some research, and I started to talk to local credit agencies that were here helping other people, and there are some good ones out there. And I wanted to know what they did and how they did it. And as I learned, it did remind me of prior 2008, where there were no real restrictions or laws or exams to— if you could read a credit report, you could open a credit repair business. That's how easy it is. Wow. You don't know who you're getting. You don't know what's going on on the other side. And I just thought, that's not right. I need to do something about that. And so I looked at it from a lender perspective and was like, I want to educate people on credit. I want them to understand there is a difference between what I can do and what a lot of these others do that I even went to find out how to get board certified. So I am a board-certified credit consultant where I have to take my renewal every 2 years and make sure that I know the laws and what's changed and things of that nature. So that way I do have something to back it up and not just say, oh yeah, I, you know, just like everybody else, right? I do credit.

Yeah.

So that, that's where it all came from. And I've been blessed over this past year to help a lot of families qualify or reestablish credit. Mm-hmm.

Yeah. No, that's amazing. And I think it's so important. I mean, I can say even from a personal experience, and we talk about this all the time.

Yep.

Like, people don't teach you about what you're supposed to do and not do in terms of your credit, really.

Well, nobody understands what credit is.

Yeah.

And so, what is it? Why do you use it?

Even my own self, it's like, you know, when we, when we buy a house every couple of years or whatever the circumstances are. I'm like, yes. I'm like, hey, I'll go to Marie and I'm like, you know, hey, we're thinking of moving again, you know, and this and that. And I think my credit's good. You know, I'm paying my bills, I'm doing the things, but like, I don't really know and I don't really know what any of it means. And there's all these numbers and I just, even I don't really understand all of it. And so I think it's so important.

I think the biggest thing with credit, I'm in the mortgage industry, you know that. So I mean, what I realized people didn't understand is why is it needed? Why do you need a credit report? Well, banks or lending institutions need a way to measure, measure your ability to repay, right? So the credit report wasn't an always everything thing. Like, it wasn't always around. It was what, I want to say in the 1980s? Actually, or was it later than that?

Early '70s.

Early '70s. Excuse me.

That's when it was created. And it was for risk.

Yeah, to measure risk. How likely are you able to pay your bills. And this was a report that would measure you in a sense to say, hey, this is how likely they are. But it's not a full measure of a person. Like there's so much more that goes into being able to pay your bills and stuff like that. And I think a lot of, especially where we're located in San Antonio, culturally, it's hard, especially if something is not taught through maybe your, because you don't learn it in school. They don't teach you this in school. So if you don't learn it from your parents or grandparents and, you know, my parents didn't use credit. They paid everything in cash.

My mom didn't either. They had one Sears card and one Montgomery Ward's card, and that was it.

And they didn't understand how it worked. I remember I got my first credit card spring break my freshman year in college down at South Padre.

Was that a good choice, Erika? Don't tell anybody.

Maybe not the best choice. Citibank, Citibank was it. And they were there, I kid you not, we were, it was a party, but they had a table set up for you to sign up. I'm like, "Sure." That's wild.

They used to do that on all college campuses. Yeah. They used to have tables set up for when you would go in and like you're learning about the school and stuff and they would automatically start handing you applications.

That's a great spring break, by the way. But the thing is, I remember telling my— I don't, I didn't know what, I didn't know how to use. I knew I could use it. I could go and buy groceries. I could buy clothes. I didn't have money. So, but I didn't even have a job, I don't think at that time. So, but I was able to use this credit card, but how was I supposed to pay it back?

And I remember my mom saying, Well, they can't get blood from a turnip.

You know that credit card followed me for 10 more years?

Oh, I believe it.

Oh my God. I didn't understand, but I didn't understand. My parents didn't understand.

Yeah.

So if they don't teach you how to manage it, then most people don't know. So I'm very grateful for you because someone out there to start off with education, educating someone what it means to have is very, very important. Very important.

Yeah. I mean, I have clients not only just local, but that have come over from Mexico. Mexico that don't understand credit because again they've never used it, or they start a business and they have no idea that using your personal funds is— can sometimes be detrimental to their business. And so by opening my own business and understanding how it works, I'm also helping them with establishing business credit. So that's another part of what I wanted to incorporate with that so that way they could understand. So it's kind of like a full educational you know, everything from beginning to end, because business credit is very different than personal credit. The scores are different. If you mess up on your business credit, there's no way to fix it like you can on personal credit.

Oh my gosh.

So it's not the same. So and they don't get that and they don't understand that or where to even go to find it. So the education piece is very key for me. And that way every month I do an audit of their file. I give them an email of breakdown of what to do with their active credit that they do have, if they have any, in order to help improve on their overall picture and their overall score. Because again, payment history is the highest ranking, which is 35% of your score right there. So even if you messed up prior, going forward, and I tell them during the program, "Pay your bills. If there's something that's gonna happen or something goes wrong where you can't make that payment for some reason, let me know immediately before you miss the payment date, because that way we can negotiate or have— I can give you tips on how to talk to the creditors to see if they will work with you so that way you don't get behind again." When you do see a lot of regulations coming in, they're trying to figure out how to help people.

I think the biggest thing is, again, not educating people what to do in the beginning. But I had someone just this morning call. I write— they're in the process of purchasing a home and they call and they said, hey, I just got an alert on my Credit Karma, which is different from what we use, but they're using Credit Karma as a tool to help follow their credit and that there's something that's going to report as a collection on my credit. That is from 2018. And I'm like, how can they do that? That's what— and it's— I kid you not, everybody has some kind of cell phone, AT&T, Spectrum, some bill from them that randomly shows up. Or the biggest thing also is medical collections that randomly would show up out of nowhere as you're in the process of trying to buy a home or fixing your credit. And it's always— and I, I never understood how that could happen where if it's something from so long ago and then they're trying to report it today?

Okay, so what I tell everybody is the bureaus are for-profit companies. They are not run by the government in any way, shape, or form. So they're like large data warehouses. So in order to make money, they sell your information. Mm-hmm. So that's all they're there for. And They're supposed to make sure that the information is correct once it's reported. But there's human error. I mean, nothing's perfect.

Sure.

And so if they get the wrong information or the wrong data, then that's what they report. And so part of my job is looking over the reports, making sure that everything is current, up to date. When things show up that were from years ago, and like you said, when you apply for a mortgage,, it triggers. And those trigger leads go out. So everybody knows this person might—

They're getting credit. They might have money. They have credit. Correct. And that you think they got money.

Everybody who has their information flagged for that will notice. And so old debts are like, oh, well, you know, if they have money to buy a house, they have money to pay this bill.

Oh. That's so interesting.

It's sneaky.

It is.

And every state is different, but the state of Texas, when you owe on a bill, they have 4 years legally to come after you for that bill through the court system. After the 4 years, then they cannot. But that doesn't mean that the debt won't still follow you. And again, if we get something that's corrected or they, they did something incorrect and we're able to remove it from your report, then they still may sell it to somebody else and they'll try to report it again.

So try to explain that one more time. Yes, I'm trying to understand. So in the state of Texas, they have up to 4 years to collect on a debt legally through the court system, through the court system. But they can still sell that debt to a collection agency who can then try to collect from you.

Correct. That's why it can stay on your report for 7 years. So say It's, you know, a Dillard's card and you didn't pay Dillard's, and so Dillard's tries to come after you, or they just send those letters and you avoid it. So then they send it to collections, 'cause after a certain time they're gonna write it off their books as a loss. So they're gonna get money regardless, you know, they don't care at that point if it's small. And the collection agency, of course, wants to make their money, so they'll try to settle it with you. And again, if you avoid it, It still sits there. But if they can't make their money, they want to make money somehow. So that's why they may sell it to another party. And so from ABC Collections, now it's gone to 123 Collections. And so now they're posting it on your report. And if you do contact them in any way, shape, or form, they can restart the clock for the 7 years.

Yeah, that is wild.

It's horrible.

So that third set of people is just Like hoping that you might do something to pay or, or communicate with them in some way.

Correct. Oh yeah. Because I mean, pennies on the dollar, you're still getting something, right? Yeah. You might, maybe you'll settle with them, maybe you'll give them, you know, let's say it's a $100 collection, but you'll give them $50.

So at that point when it's a collection company, none of that money goes to Dillard's. It just goes to this collection company who's putting in the work to try to collect Correct.

Because they've already paid them for that.

How interesting. So it's literally companies making money off people's debt, essentially.

Huh.

That's wild.

There's—

see, but I'm telling you, people don't know. I have no idea how any of this works. I just know we're supposed to pay our bills, and so I pay them. But, you know, it's like, you know, I just— you don't know.

But I think I know when people try to come to— or like, they need to speak with me for a mortgage and they do have some credit concerns, they're very leery. They're very— it's— It's very stigma.

It's very personal.

It's like I always tell them, it's not a test you have to pass with me, right?

Not—

you don't pass this test.

It's a good way to say that.

Like, it's— you're not failing. It's just— it's life, right? So when we look at it and I tell them, like, you're normal, like, you're a normal person. You have— you have a collection. I kid you not, some cell phone company always shows up somewhere, right? It's there. And I tell them, like, hey, it's something that's normal and we have to get past. We just— but you can't hide from it. So we got to figure out a way to make sure that it doesn't follow you forever. And what does it mean? Like, a lot of times I think people, if I just don't open the bill, maybe I'll just go away. That's it. It's, it's, it's— I don't understand how it all works. Yeah. Then, you know, it's easy just to not open the bill and just ignore it or ignore that phone call that they've called 100 times.

Well, so like, I've had it happen where stuff has showed up on my credit. One time specifically, it was like I had gone into a doctor's office and it was just like the copay or like whatever. I, I don't know what it was, like $30 or $40 or $50 or whatever it was. And I didn't like, at that time the person at the front was like, no, you don't owe anything. And I was like, oh, okay. Like, no problem. And so then it was a situation where like time had passed and of course we had moved.

Mm-hmm.

And so I didn't get a bill, like I didn't receive any, no one tried to call me on the phone. Like I didn't get a bill or anything. And so then when we were looking at our credit, It was like, hey, what is, like, what even is this thing? You know what I mean? And so I've had stuff show up in that way where like if we've moved and like they've mailed us stuff, I didn't maybe get it or whatever the circumstances were.

Yeah. It didn't work out to you or whatever. Yeah.

Whatever the, whatever the case was. But I was just like, what even is this? It, so much time had passed, um, that you almost don't even really remember at that point. And it's like, oh shit.

I guess I should, I have one, I have one right now that continues to call and I said, you need to send me a bill. Yeah, I have not moved since. I, I've never received a bill, but it was for when Tyler broke his arm. He broke his arm back in 2019 before COVID broke his arm. And I, I paid the full deductible upfront.

Yes.

And the 20% that I needed because we knew it was a planned surgery for his arm. So I, I knew what was coming. So, and they said that there's $495 that's unpaid from that. I'm like, show me the bill for what is it for? Mm-hmm. I no longer have that insurance, first off. And I need to get— I want to make sure that it's not overpaid, or who we pay. I mean, it was—

you need an itemized bill.

I want an itemized bill, see what it's for. And they will not send it to me. I have not received it. Does that seem sneaky though?

It does, right? Like, why won't they send it? It's almost like, hey pal, if you have this info, like, send it on over.

Yeah, I think they just collected a bill, and maybe the collection agency does not have an itemized bill, and they can't, they can't provide it. This note that I Is it showing up on your credit? No.

Good.

So, yeah, I keep my monitor.

Is it possible that some of these things are like from these crediting things are like fraudulent things?

I think I will.

I mean, it doesn't start out that way. Yeah, it really doesn't. I mean, it's valid information and again, they buy these debts, but they don't always have all the data.

Yeah.

And that's part of what the research that the bureaus are supposed to do. And so when I send the request for them to validate these items, they're supposed to reach out to those parties and get that information. So whether it be the contract or anything that you signed showing that you agreed to pay this bill, well, a lot of times they don't have that information.

They—

a lot of it because it's paper. Still, or it wasn't sent over all electronically. And especially like with medical bills, because of HIPAA laws, they can't send them certain details. And so if they don't have that information, then the bureaus have to remove it from your report because not all the data is there to confirm that this is legitimate. But people don't understand that or they don't know that.

I think it takes work for people to— and it's very time-consuming. And that's where someone like me comes in because I can work with people all day long and tell you what to do, but I can't do it for you. You have to do it and staying diligent on it because it's work to work with all the different—

It is, and it's time-consuming. And that's what people don't understand is that I tell all my clients, credit repair is free. You can do it yourself. There's no need to pay someone like me or any other company to do it for you. What I am is just your accountability partner. I'm doing the heavy lifting, just like when you go to the gym and you pay a gym membership and you don't know the machines, you're going to pay somebody to teach you how to do it. Well, that's what I'm doing is I'm teaching you about credit and how to do it yourself. So that way you get to a point to where you're like, "Oh, I get it. Okay, I can do this on my own." Or you'd be like, "Nope, can you please just keep helping me to that?" to get where I need to be. And then afterwards, if they still need the help, they can reach out anytime to ask questions.

Yeah.

Would you say that primarily clients come to you because they are trying to purchase a home?

Uh, first, yes, that, that was my big sphere of influence was lenders, Realtors. And so mostly that's what I had referred to me. But even some of them that they talked to that just had no credit again, and, or the clients that I have have referred me family members that want to learn about credit or establish credit, especially like their sons or even their parents, in order to really know what to do and how to do it the right way.

But credit affects not just purchasing a home, you renting, to rent a home, getting a job, getting a job, your credit a lot of times can be pulled depending on what you're doing. Insurance is a big one.

That's a big one now. Yeah, definitely. The insurance companies are really looking at your credit to price you out to see what you're going to be able to get. So if your credit's low and you want to insure your car or your home, it could be almost double because of the fact that your score's so low.

That's so interesting. I guarantee you that many, many of my clients don't know that. They have no idea. I mean, it's what, like, I think in our industry, people are just, focused on being able to qualify to buy, right? Like, hey, what does my credit have to look like just so I can sneak in here to get a mortgage, right? But then I guarantee you they're not thinking about the fact that like, not only do you need good credit or decent credit for this, but this is going to affect your payment because it's going to affect your homeowner's insurance. Yep.

Right.

That's so interesting.

And then like, why did my payment go up so much in a year? Your credit changed too. You know, like, obviously when you, when you you get debt up front, you do have a drop in your score because you've accumulated new debt. And it takes time for that to, to register and to affect your score positively. But it does affect your score. But people a lot of times will see an increase in their mortgage payment a year or 2 years later because maybe their credit was lapsed or they've gotten worse. So their insurance— not, not obviously their mortgage is fixed and it's not changing, but their insurance has changed. And insurance in general right now is excessive. Just homeowners insurance and car, it's very expensive. But because your score dropped, now they can rescore you and charge you more. And you have to have insurance if you have a home.

Yeah.

So a lot of times it's something that I— we try to stay on top of it with people and helping them understand. But again, if they— I wish schools would have it, have like a class or something. If anybody out there can change that. But I hate that. That's the only way we can measure risk.

Right.

I hate it.

I hate that there's so much more that goes into getting qualified and looking at someone's ability to pay. So it's so different.

Well, like we just talked about before, and I've had clients in this circumstance where they have paid cash for everything because that's how their parents taught them to do it. And so to have no credit is also looked at poorly. And so you almost get penalized for just paying everything outright, you know?

Right. No, definitely, because then you don't show that you can handle that credit amount or that risk. And again, it all comes down to risk, and that's what they're looking at. Because as a lender, I used to tell my clients, and y'all can use this, anybody can use this little analogy, but it's like, go to your next-door neighbor, knock on the door. You may not know them. When they get to the door, be like, "Hey, I really like this house across the street and I'd like to buy it. It's only $350,000. I'm good for it. Can you borrow, can I borrow it from you?" Yeah. And what are they, what do you think they're going to do?

Yeah.

And so they're either going to laugh or they're going to close the door on your face because they're not going to give you, they don't know you. So that's where the application comes in. That's where all your details come in because they're looking at the risk. And as a lender, our job is to paint the picture for the investor to want to give you that money, to just be like, take my money, I know you're good for it. And so that when you explain it in simple terms like that, because again, we get wrapped up in our jargon, we get lost in our, you know, different details, and they don't know what we're talking about, but they don't want to ask either because they don't want to seem like they don't know.

Well, because I think it's assumed that you're supposed to know.

Correct.

There's no way that anyone would know. I tell everyone, I, if I didn't do what I do for a living, I would have no clue. There's, there's no way I would know.

Yeah.

No way. Because you can't learn it. You can't, you know, you have to do it.

Right.

So, and even people who've been doing it for a long time don't know what they're doing.

Yeah.

Because it changes. The rules do change. They change on it. And I, I, it's so unfair. But I think if you have someone like me that to help you walk you through that process is not as painful as it can be.

Yeah, and that's the thing. I always try to make clients understand that I've been there. Same thing, the college thing. Everybody was throwing credit cards at me, and from mall cards to big bank cards, and I didn't know any better. So there I am, sure, okay, I'll take a credit card, whatever, and not being able to pay the bill when it came in. And so The lowest credit score out there is a 300. I think at one time mine was a 350.

Got it.

And I didn't know any better. I didn't know what to do. I think my first car I bought was like at a 19% interest rate because I didn't have credit. I didn't know how to use credit. So learning about credit, understanding how to get out of that in order to buy our first home, in order to buy a better car, get better things. It was a learning process and it took time and it took years. Now, not saying that it will take everybody that long because that's a big question that a lot of clients ask, or if it's a real estate transaction, the lender or the realtor will ask, how long is it going to take? You know, I really want to get them into this house.

I have been guilty of asking that question, but it's a valid question.

Yeah, but again, I tell them everybody is like a snowflake, none of the same. So it depends on their situation and what I see and when I go over it with the lender to see what they've already done as far as like their analysis, because they can do those little trackers on the back end to kind of give them a guide. And if they've gone over it with the client, then I go from there and see, and then I can kind of get a range. But on average, I mean, it could take anywhere from 3 to 6 months. Some can take longer depending on how low their score is. And I've had clients that got Like you said, just enough to where they qualify, they get into the home, but still continue the program after the fact because they know maybe in a year I could refinance because I'll have a better score.

Yeah.

And so they still want to keep working on it so that way we do our due diligence of being able to be there for them, help them. And again, it comes right back to you.

Well, it takes time. A lot of times that I've seen in the type, in the, in the type of clientele that I've received in the last 2 years, A lot of it, if their score is low, it's not because they have bad credit. They don't have enough credit, right? They might have a collection here, a medical collection, whatever that showed up, a cell phone thing, and a good credit card. Like, that's it. They don't have a lot, or they have student loans that are in deferment forever, like just sitting there. So I tell people like, how long will it take me? Well, depends, because it's a vicious circle. You try to go get— let's say, hey, you know, in order to boost your score, The quickest is to get a new line of credit. Go get yourself a small credit card. Well, they can't because their credit score is low. Right. They can't get approved. So it's a vicious circle of how to develop that. And a lot of times, if they, if they can start off on the right path in the beginning of building their credit when they're young, much easier versus trying to make up the difference, you know, in your 30s or 40s.

Right.

Trying to figure out what to do you should have done 20 years ago.

Right. You know, so, Mia, what would you, if, if you could give advice to a young person just starting out trying to, you know, build good credit, what would you advise?

So for me, the way that I did it for my sons was I got them a secure card when they were in high school. And so during that time, they were only allowed to, like, when they got a car, they were only allowed to put gas on that car. So that way every month they could pay it down or pay it off. And it just, started their clock because, again, the history is part of your score. And so it was establishing good payment history, length of payment, length of time on their credit. And so by the time they graduated high school, they were already in the high 700s.

Oh, good. Yeah.

And but again, it was just monitoring it. And so another thing that parents can do, just depending on they know their children, if they want to put them as an authorized user on their accounts. They don't have to give them a card, but it at least starts to establish that length of history. My father-in-law did that for my husband and had a card from like 1975 with good payment history and everything. So the moment he added my husband, 45 days later, my husband's credit just shot straight up because it looked like he's had an old card for all this time. I was like, We were like 2.

Yeah.

And so, yeah. But that's the quickest way to establish credit when you're young. Yeah. And again, a credit mix is important. So not only having a credit card, but also having, say, either a personal loan, a car loan, an installment loan of some sort that's going to have an end date. So that way it sees With the risk factor, it's looking at how do you manage the different types of credit. So by having a good credit mix, it also will improve your score.

And it just takes time to build. Like, it's time that a lot of people need in order to build up the credit. Yeah. So, and I tell people, when I pull credit, I'm not seeing real time. I'm seeing typically, if I was to pull today a credit report, I'll probably see September's information or maybe even August. Information. I won't see October's information because it's not reported yet. So I'm seeing old stuff. So if you made a payment or something, when it like shows up later, it like it hasn't been reported on all the bureaus yet, right?

So I don't report it different times because there's 3 separate entities, so they don't talk to each other.

What is the difference between these 3? Why are there, why are there 3 separate ones that are considered, and what is the differences?

Good question. Why is that me? Because I don't know that answer.

Well, again, they all had their own ways of doing things. And so Equifax was the first one, and then TransUnion was created after, and then Experian's the newest one, the youngest one. But there actually are more than 3. So I don't know, some people don't realize LexisNexis is the same thing.

Yeah.

And that's where the insurance bureaus come from. But they all have different risk factors and weights, and depending on which lenders that they work with, because you can see like some of the store cards won't report to all three. And so that's why the scores will never match because they all weigh differently and each one has their own thing because they have to pay for each of them to report. So again, with the way that they each—

So let's say you have a Chase card and it reports to TransUnion, Equifax, right? And it doesn't report to Experian, so it won't go to all 3.

So when you're pulling credit for a client, do you just like average them? Like, how does that work?

So I always tell people you have a high, you have a middle, and you have a low score. So when I look at them, it's going to be your middle score that is used for qualifying of the— but it's the lowest score. If you have multiple borrowers on the loan, it'll be the lowest middle score of the 2.

I see. So like if your husband has terrible credit but you have great credit, the bank thinks you have bad credit for the loan. For the most part, yes.

Again, based on risk. So they're looking at the riskiest one. Who's the riskier buyer?

Yeah.

And that's the score they're going with.

My husband's very lucky because I take care of his credit.

Yeah. Oh, that's great. Yeah. Yeah.

It's hard. It's difficult. Like, I think the biggest thing you had asked the question, like, for a young person, what to do, understand that that plastic thing that you're swiping, money doesn't magically appear.

Yeah.

Like if that's, you know, like having them understand the difference between having the cash in your hand and using that card. Because I remember my son being young. Mom, I said, Mommy doesn't have any money. We're not going to where whatever it was. He goes, just use the card. Like, oh, there has to be money behind it, son. You can't just keep using the card. Yeah, I didn't understand. I remember in our ages, it's like Just write the check.

Yes. Remember? Yeah, exactly.

I remember thinking that, not understanding how it all pulls together. And I wish the education system would really truly like invest into a program to help people understand how money works. 'Cause economics ain't doing it.

Yeah. They don't know how to help you.

That's so true.

It ain't working. Sorry.

That's so true. And so do you have then some advice that you could give not a young person, but somebody that maybe their credit isn't great. Like, what are the, what are the first kind of things that you tell your clients when they come to you as adults and like that their credit is not amazing?

Well, I want to know their story. What happened? And I've had other people tell me, why? Why does it matter? You know, it just matters. And I said, it does matter. I mean, for me, I've always been empathetic to people. And so I want to know what caused it and What can we do to fix it? And it also helps me screen clients because then I know if they're actually gonna take the time to do the work that I have them do or not. Because then at that point, I'm not gonna take their money. I'm gonna be like, I don't think we're a good fit. You know, because if you're not gonna take the time, 'cause I've had some call and they're like, I don't wanna do anything. I just want you to do it all. And I'm like, it's not my credit that's messed up.

Yeah.

You know, this is your responsibility.

It's like losing weight. Like, no one can lose the weight for you.

Right.

You got to do the work.

Exactly. And so talking to them and understanding what they're going through and explaining to them, again, if you start the program, make your payments on time. I mean, that's the biggest factor. And then from there, just seeing all the other— how it all plays together and how we can, while I'm working on the old stuff or the negative, items, that let's try to get your positive stuff back on track. And whether it be getting on a family member's card as, you know, an authorized user, or starting opening up a new card because they don't have enough or any, because they've closed them all out because they thought that was the right thing to do before.

Oh, yes.

Because they were like, oh, I paid them all down. They're all at zero balance. I'm like, well, there's nothing for the risk calculator to— the algorithm's thrown off because it has nothing to calculate.

I've always wondered about that part. So like, I'm big on trying to, trying to have no debt, right? Like be debt-free. That's what we all want. And so, but then I've noticed when I have paid things all the way off, sometimes it negatively impacts my credit.

Yes.

They want you to have just a little bit of debt, I guess.

Because it closes those accounts eventually. So no, I always took it as, I had one for Bank of America for years and I would keep it at low balance and I never used it. I would just, I'd get the card, lock it up in the safe, and when I got a new one, lock them. Well, they don't want you using their name or their credit line or holding those, I guess, available funds available if you're not going to use them. So they would close your account and you didn't, I didn't know.

Yeah, I've had that happen too.

You know, I'm like, oh, I need that. Oh wait, it's closed. What do you mean it's closed? I've never used it.

Yeah. And then if it's your oldest card, it throws off your ratios.

Yeah.

Because now you've lost that credit history. And so that affects your score. So not only did they close that line of credit, that also threw off your utilization because they want to know the usage. So if you had all this available credit and now it's gone, so now your usage is low, almost like debt-to-income, your DTI, it throws the numbers off. Just one little thing can— Throw it over.

It's learning to play the game.

Right, so what's an ideal amount of debt then to have, do you feel like?

Well, with credit utilization, they always say it counts for 30% of your score. So the magic number's 30. If you're under 30%, then it looks positive because you're using it actively, but you're doing it wisely.

Break that down, 'cause that you're talking, so break it down. So for example, if you have, let's say, a $1,000 limit on a card, So we don't want more than $300 used on it, under $300.

But the magic number to boost your score quicker is under 10%.

Oh, just a little bit.

Just a little bit. So they take all active credit cards, not installment loans, but credit cards, and they average out. So if one's $1,000, one's $3,000, one's $5,000, they add them all up and see what the overall utilization is. So if it's under 10%, then you're using it positively. Now, not to say that you can't use a lot more of it when needed. Sure. But again, it's going to impact your score. So your score may dip when you have to use some more, but the moment you bring it back down, it'll go right back up.

'Cause it does this, right?

Yeah.

And a lot of people like, when I pull credit, 'cause I'm only seeing a snapshot in time, I'm not seeing real time, and you might have paid off a card or paid it down, but when I pulled it, it's still pulling information from 2 months ago or a month ago and doesn't see that. They're like, "Well, why is my score not higher? It says on Credit Karma," or whatever tool they're using, "my credit card app." And I'm like, "Well," and it's really hard to explain because it's not transparent. It doesn't explain the information to you. But understanding how it all works might be a little bit more clear and not so confusing. But that's, I get that a lot from people like, "What? I just paid off that card." I'm like, Well, still showing the balance.

Yeah, if they just paid it off this month, the bureaus have 30 to 45 days to get that updated on the report. So they're still not going to show immediately, right? So it takes time, and that's why we keep telling— it's a time thing, it's a race, not a sprint, right?

I think that's where like the frustration comes from the consumer, and that's why it's good that there are people like you to kind of— yeah, hold the hand and sort of like be like, hey, you know, it's gonna be fine. Like just keep it going in a positive way. It's like, I know for me, like for my clients sometimes, I'll send them to Marie and I'll ask that question that I'm not supposed to ask. Well, how long is it gonna take? And then she'll be like, ah, 3 to 6 months. They can buy next year. And then these folks get discouraged and they're like, well shit, if it's gonna be a year, why am I even doing this? Like I wanna do it right now. You know, and it's like, ah.

It's that quick gratification.

Yes, yes.

And I think that's like just a part of society in general these days.

It really isn't. But again, when you refocus that, and that's what I tell them, I'm having you refocus and rethink credit and what it's there for. If you know how to play the game, you'll know how to use it to your advantage.

Yeah.

And that way you're the one in control because again, it's your credit. You have all the control. It's just how you use it. And the same thing, it's going to take time. It didn't take time for you to ruin it. I mean, you know, it did take time for you to ruin it. I'm sorry, but it's going to take time to fix it and it can be fixed. So just because you can't buy right now doesn't mean you can't buy ever.

Right.

You know, it's just rethinking it and how you want to do it.

And now you mentioned that business credit, you can't go back. Your business credit is what it is. And so you've got to make sure to take really good care of it from the get-go. Is that correct?

Correct. Right. And then how we can pull or you can go on Credit Karma or these third-party sites, the annualcreditreport.com, and get a free copy of your credit report. You can't do that with business credit. Do that, you have to pay for— you have to go. And if you really want to see if you're establishing it correctly, then you pay for it because it is a business. And so by seeing what your score is through there, if you are really interested, then you you want to keep an eye on it, definitely. But yeah, a lot of times when you open up a business, you want to put everything under there so that way you start establishing your business credit and you start getting those loans and credit cards that are for the business directly so it doesn't start affecting your personal credit.

Right.

I have— and it happens a lot. A lot of people like, oh, a lot of realtors who want to buy a home, it might have a team or something like that where they have a vehicle that their business pays for, but it's under their personal credit report because they had a better score or whatever. They got a better interest rate on that. But that gets calculated into qualifying when you're buying a home or credit cards. Oh, the business pays for that. That's a lot of documentation to try to prove when you're trying to, when you're trying to purchase something. And you need to qualify. So a lot of times I tell people, you really got to keep your credit, your personal credit and your business credit separate. They got to be paid by its own. You know, you don't want to keep— oh, I got a better interest rate when it's under my name versus my business name. Yeah, yeah, it can hurt you in the long, long term.

Oh yeah, that's interesting. And the things to maintain good credit for a business, would we say they're similar things to maintain good credit personally Or are the actions that you would take, do you feel like different?

No, it's— that part follows the same. I mean, just make your payments on time. Make sure that you don't overutilize the accounts or pay them off as quickly as you can. Because again, with business credit, most of the cards want it paid off every month depending on the type of card that you get. Some of them will allow you to do payments over time. Like we do with personal credit, but a lot of them prefer, because you are a business, that you should be able to pay it off immediately. And so that way it will help start increasing your score because unlike where we have the 300 to 850 on personal credit, it's pretty much up to 100 on business credit. So the scoring method is very different. Oh, very simple. But it's, it's looked at as far as the same type of method to be able to figure out, you know, what your best score is going to be. So of course, building up your business credit, you're going to get better cards, you're going to get better accounts, better rates, right?

And you help your client with the business side of things as well.

I'm starting to.

Yeah.

Yes. Yeah. A very basic overview, but when it gets a little more in-depth where they actually need a financial consultant, then I will refer them out to somebody.

Oh, I see. That's good.

Yeah, because I don't have the licensing for finance, or even with personal credit, if they start getting the letters that they're going to court, like they're getting sued by the bank for within that 4-year window to get, you know, whatever their money back is, I refer them to a lawyer.

Yes.

Because at that point it's out of my hands. I'm not a lawyer. I don't have a law degree. I have an idea of what to tell them, basic information, but I do preface it with these, this is not anything legal. So if you need to have legal advice, I have somebody that you can talk to who's willing to help out.

Well, I, I think a lot of times I was thinking of what I, I used to refer back before 2008, that some of the credit repair companies were not as diligent of helping people. And I remember letting— you have to stay on top of your credit even when you have someone helping you. But they would have where they, um, maybe it was more debt consolidation versus needing credit repair, and a lot of people didn't understand the difference. Um, does that make sense? So they would go to, to a company, they would make them go delinquent and then to, to, to— in order for them to negotiate a lower balance, people did not understand how that affected them and they would pay a payment to this company. Right. And then the company would apply that as they needed to, not as that was required for like the minimum payments or whatever.

Hmm.

Have you ever— have you used—

So yeah, there's a lot of debt consolidation companies that are out there. I don't prefer them. It's very different. Yeah, correct.

So making the difference— people have asked about that and I wanted to make sure that she's completely different. She's there to hold hold your hand. You're kind of more of a— I felt like a counselor.

Yes.

And a teacher, right, is your role in the whole thing. But I knew companies that people would send money to and not understand. Like, they wanted to— oh, someone else is doing it for me. And you can't be— you can't, you can't just back off and forget what to do. Or like, it's still your credit.

Learn— how are you going to learn? Yeah, you're not learning anything, but you're just letting somebody else do the work for you. But the one thing that I'm not a big fan of those companies is because, like you said, they tell you, don't make your payments because we're going to negotiate. And usually they have lawyers on their group to do the negotiations. But while you're— while they're negotiating, you're going farther and farther behind. Now you're 30, 60, 90 days behind. And so it's going to take longer to fix your credit. Well, that means you're paying them more during that time in order to do this. And so what they do is they consolidate all those debts and— but there's no guarantee all the debtors will agree. So sometimes they will get all of them, but not always. So if they get them all to agree to a certain amount that you can— that's feasible for you. So you start paying that amount along with what you're paying to them, or they collect their fee after a certain time period, but they get a percentage. And so it's— it can come out to the thousands.

Yeah. Paying quite more than what you should have been paying.

Correct. Because again, you could do it yourself. Yeah, you could make those negotiations. But if you don't know what to say or how to talk to them, then you don't know what you're doing. So it's intimidating and you're afraid to talk to them because— but everything's a negotiation and again, you're in control. So Don't let them scare you because that's their job, is to scare you into paying. But if you take control of the situation and know what to say, then you can negotiate your own and not have to pay these companies to do it. It's just, it's a, it's a Band-Aid.

Yeah. Yeah.

No, that makes sense. Well, this whole episode, I feel like, has been so interesting. I personally have learned so much about credit. I learned that I didn't know a thing about credit.

Well, there's a lot. There's a lot. There's a lot. I mean, as you go through, I've learned over time, obviously, and I'm not— I'm not licensed like Mia, but it's something that I've learned. I'm like, hey, I've— and you see patterns, right? You start to see them like, wait a minute, I've seen this before. This has happened to somebody else and so forth. And I started to learn and really dived into it. And it's heartbreaking. And it's really just people who they feel bad if they have a bad credit score. I'm like, don't like it. It's life. Life happens. And I wish lenders or people who are insurance companies can take a step back and look at the whole person and not just what's on that report because there's so much. What caused her? I love— I loved what you said about getting their story. There's always a reason. Like, hey, we had a death of a wage earner. When someone died, someone passed away and we got behind on our bills or got cancer or something's happened to cause someone's score to go down. No one's intentionally trying to get credit and not pay their bills. It's— that's rare. I mean, that is really rare. Most people just, I lost my job, I got laid off, I— whatever, you know. So when you know the story behind it and they, and they have a true understanding of now where they want to— where they are and where they want to be, you'll have someone who can get a, get a home or get better insurance or whatever their goals are.

Yeah, should that make sense? Well, we typically ask our guests what their favorite thing is about what they're doing. And so I want to know what your favorite thing is about what you're doing.

My favorite thing is just knowing that they're going to pay it forward, that once they understand and learn how credit works, I just— and I tell them, let others know, explain it to your children. If you know, spread my information because again, it's free. You need to understand this, and they don't teach it in schools. So I love being an advocate to educate people on the understanding of credit and how it works and how, you know, these— again, like I said, the bureaus are not your friend. They're not there for you. They're there to manage risk and to sell your information.

Yeah.

Yeah. Yeah, no, that's true. I mean, people need to, people need to know about it. So I think that's, that's amazing. And then lastly, will you let our listeners know how they can get a hold of you for your credit repair services?

Yeah, definitely. The laws have changed and so we're all having to adapt. But because of bad credit repair companies out there, they have made it to where you can no longer through the telemarketing sales rule, you cannot talk to leads upfront. So they have to go on my website and apply there. They can set up an appointment through my website, which is just www.thecreditvixen.com. But any credit repair organization, and this is through legality, You are not supposed to talk to someone until they are a client. Oh, okay. You used to be able to, you know, get referral, get them on the phone, talk to them, or text message. You can DM through social media and you can text through the website, but you cannot— are not supposed to even talk to a credit repair specialist in advance. And if they do, they are violating the law.

Hmm.

Yeah.

So it sounds like the website is the best way for folks to get a hold of you.

Correct.

Okay, perfect. Well, we will put your website in our show notes so that people can just click a link and that makes it really easy.

Yes.

And thank you so much for being on today. Like I said, I learned a lot about credit personally, and I know that our listeners will have definitely learned a lot after listening to this episode.

Yeah. And I'm always available to help in any way with any questions.

That's wonderful. Thank you so much. And then I'll also say thank you to our listeners for tuning into this week's episode of the Working Moms of San Antonio podcast, and we'll catch you guys next time. Thanks so much for tuning into this episode of the Working Moms of San Antonio podcast. We hope you loved today's chat and found a little inspiration to take with you into your week. If you have a podcast topic suggestion or a question you'd love for us to cover, definitely send us an email at hello@workingmomsofsanantonio.com. We'd love to hear from you. And until next time, see you in the community.