How to Get Out of Debt & Improve Your Credit Score [Simple Steps to a Brighter Future] | Bryan Guerra | Skillshare

How to Get Out of Debt & Improve Your Credit Score [Simple Steps to a Brighter Future]

Bryan Guerra, Entrepreneur | Marketing | eCommerce

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10 Lessons (40m)
    • 1. 1)How to Get Out of Debt & Improve Your Credit Score

      6:12
    • 2. 2)Course Layout & Overview

      2:14
    • 3. 3)Approaches to Getting Out of Debt

      4:00
    • 4. 4)Example Plan of Action

      5:00
    • 5. 5)The Importance of Credit

      2:57
    • 6. 6)Components of a Credit Score

      6:42
    • 7. 7)How Fast Will My Credit Rise

      2:38
    • 8. 8)Keeping Records of Your Payments

      1:49
    • 9. 9)Should You Settle Your Balance

      7:58
    • 10. 10)Course Project

      0:52

About This Class

Being in debt is a scary thing. It's one of the scariest places you can be. I know because I've been there myself. Not only have I been in debt, but I've learned how to get out and how to say out. I've also extensively studied what goes into a credit score and how you can improve yours.

Don't make the mistake of trying to claw your way out of debt or improve your credit score on your own. It can be like running on a treadmill. You're not going to get anywhere. Let me share my knowledge and my plan of what worked for me. Then we'll focus on building your credit back up.

You're one Course away from hope. Enroll today!

Transcripts

1. 1)How to Get Out of Debt & Improve Your Credit Score: Hey, guys. And welcome to the course. I got a great, great one for you today, So I'm really excited to bring this to you, because not only is it great information for my anecdotal experience and you know, the information on accumulated plus the information and the experience that I've actually gone through with this process. But I know that this information and this course can change people's lives. Credit debt. It's a big thing, not only in the US, but across the world, across the globe. You know, it s so we can kind of get it, get a grasp on our debt, get a grasp on our financial situation in that credit, you know, area. Then we can really start moving on and really free ourselves. You know, from the from the the slavery that is debt. Okay, we're really give us financial freedom will give us the ability to chase our dreams. That will be It will give us the ability to really, you know, make choices that are based on our passions. And you know who we are as people and what we want to do an accomplished in the world rather than you know how we can afford the next thing or how we can pay this or that. So that's the biggest thing for me. There's a bunch of different reasons why you might want to get out of debt. There's a bunch of different reasons why you might want to improve your credit on this course will cover both of those. And it will kind of be in a two section format. And I'll lay it out in the future Electric for you. But the first thing I want to touch on and get into is why you should listen to me. You know, why am I qualified to teach this course? Well, I just want to give you a brief story and synopsis of my history currently. Obviously, I'm not sure I'm you know, I have a lot of successful businesses on mine. I do drop shipping. I do Amazon F B A. I do a number of different things across the digital marketing, an e commerce spectrum. And clearly recently I've been getting into content creation. I have, you know, YouTube channel. It's up, up and coming. I have, you know, a bunch of different courses that I'm that I'm listening. So I'm really into the content creation Game two on top of the digital marketing e commerce . And I really started in this field about a year or two ago. It was about ah was closer to two years now, actually. Welcome back. But so when I first started, I kind of bounced around a lot of different jobs before I actually, you know, I acquired the information. I knew what I wanted to do. I knew I wanted to get into this online making money game, so to speak and, you know, kind of start setting up passive income streams because that's something that I was big on . I was big on education. I was big on self herself, you know, taught, ah, entrepreneurs. I saw these things, but they weren't like these big figures that were, you know, like the Tai Lopez is of the world where you know, the Bill Gateses and clearly Bill Gates this way, you know, more elevated than Tai Lopez. What I'm trying to say is they weren't thes, you know, these ideas that were unobtainable. I saw regular people just like me and you that were on mine making money and it was blowing my mind. So I realized that these people were doing these things, you know, in my backyard these people were doing these things in similar situations like me and like you and that that could be an avenue that I wanted to take. And so what I did is I decided that I was going to form a plan and stop, you know, trading my time essentially in for money. Because if you if it regardless of what you're earning, if you're trading your time and for money you're always working, so to speak. I don't work anymore. I genuinely enjoy what I do. And I get paid to do what I love. And I love that. So you know, not just this course, but any of my courses can bring that to you. But I was working a bunch of odd jobs, basically not 9 to 5, you know, part time jobs here and there to kind of pay the bills and do this and that because I was in debt. I made some stupid decisions when I was a bit younger when I was kind of in a vulnerable place after. To be honest, a break up and I made a bunch of stupid charges that I shouldn't have done. And it really put me in debt to about, you know, roughly. I think I was, like, 13 grand, almost that I was that I had charged on cards that I couldn't afford to pay. I was still in school, you know, I had I had to not only, you know, continue with my classes and and do well. But I also had Teoh, you know, work odd jobs here and there just to pay for it. And I'm sure that's a similar situation that a lot of you guys air in. You need to continue the work just to pay what you've already charged on credit. Well, this course is gonna lay out for you. You know how you can not only make a plan, but how you can improve your credit and start paying off all your debt so that you know, whether it's two months from now six months from now. Ah, year or two years from now you're finally debt free And you have that freedom eso the first step that I actually took to paying our home. My dad believe it or not, I think I was roughly that 12 grand Mark, 13 grand. Mark and I took a leap of faith. I knew that I had to stop trading in my time for my money, like I talked about earlier. And the reason for that was because I wasn't making enough money. I was making peanuts relative to how much I needed to pay on my cards, because the IMF interest was calm pounding and I couldn't pay for it. So I really took a leap of faith. I took a chance on myself, and I launched full heartedly into this business that you now know as BG Media Innovation. And for the first, it was really a leap of faith because for the first couple months, my credit just kept building and building and building, and actually one of my accounts wanted to collections, so that was a big hit to my credit score. So the reason that I'm telling you this and giving you this anecdotal experience of this story is so that you know that I identify with their situation. I've been there too. I'm not just talking about, you know, stuff that I've learned from a source here and from source of hay and source B. I've I've been there. I've been in debt. I've made the dumb charges, have charged too much, you know, more than I could pay for. I've not only had to pay it all off, but my accounts of going into collections that I've had to deal with that too. So I've been through the process. I've been there myself. I can not only understand and sympathize with your situation, but I can instruct you on not only how I got out of it, but how you can too. And that's what I wanted a way out for you guys. I just kind of wanted on, you know, get you to understand that I've been there, you know, and I understand the process. So with that being said, we're going to jump right in so that you can start learning and, uh, you know, we'll get right into it. So the sooner you learn the studio, you can start formulating your plan to get out of debt. 2. 2)Course Layout & Overview: Alright guys. So I just wanna give you a brief overview of the course and the sections and the way it's gonna be laid out for you. So the course Lau is basically laid out into three sections, three main sections and these sections are you know, how to actually pay off the debt and forming plans of action so that that's you know, that's the That's step one. That's what you really need to come across. You need to kind of figure out what your finances are former plan of than that of plaintiff in action form a plan of action. I'm gonna give you two different methods that I you know that I know of. And then I'm gonna give you one that I recommend, and then you're going to basically start paying off your day. The next thing that we're gonna touch on after the plan of action and how you can actually pay off your debt is information on credit because that and credit go hand in hand. And you know, you need to understand credit and your credit score and what goes into that actually more so so that you can, you know, build for the future. Because if you if you're in debt, if you if you've ever had a ah, um, you know, Miss payment or in accounting or questions or any anything along that spectrum credit is something that you should know a lot about because you're gonna have to repair your credit . Now. It's not the end of the world. If that happens, it's happened to me, and I can. You know, I've have decent credit now on its building, and it will get better as the years go on. But you need to start understanding credit and what actually goes into your credit score. Because what credit basically is is it's an indicator to future companies, Whether you're running, whether you're buying, whether you're looking for a loan or anything across the board, it's an indicator of trust that business could have, you know, to do business with you. So that's important to understand. And then finally, we're gonna touch on how you can repair your credit, because I'm under the assumption that if you're watching this course and you're in debt or you're trying to improve your credit score, obviously you know this is relative to you, so I'm gonna talk to on this. This is something that I learned and it totally and really saw a great great, you know, return and and, ah, you know, kind of baseline on my credit when it was pretty much shot all the way down. So I think it was like I want to say, like, 4 80 At one point, it was pretty bad. It was. Might have even been lower than that. So, you know, this is this course is really gonna help a lot of people. I'm gonna end this lecture here, and then we'll jump right into the first in the first section of actually learning about paying off that informing plans of action. 3. 3)Approaches to Getting Out of Debt: Okay, so here we are in the first section of the course, how to get out of debt and forming a plan of action. Basically. So the first thing I want to go over is the two different methods and strategies that people actually teach to do this. The 1st 1 is to organize your debt and your card balances, and then start by paying down your highest interest rate. First. The reason for this is the idea that that, you know, you're basically accumulating money spent, um, or money that you don't spend on your cards, you know, And you won't pay down your highest interest rate first, so that you're not paying that extra money now. It makes sense in theory, however, there is a second method that I actually recommend better. And I get to that, uh, you know, in in a second. So the second method is organized. Your debt. Such a card balances obviously just like the 1st 1 But then, instead of paying down your highest interest rate, first you pay your down your your lowest that amount first, obviously, either one that you choose. You're still gonna be paying the minimums on your other cards. If you can't and you've missed the payment, you know, understandable. But do your very best to pay down the minimums. You should at the very least, every month, hopefully be paying your minimums that will, you know, obviously avoid late payments which stay on your credit report for seven years. And that's kind of beyond the scope of the sexual section. But you should always be trying to pay your minimums every single month. And then on top of that, choosing one of these methods I'm gonna goingto the Mecca. The method, the method and approach that I actually read recommend to do this. And that's writing out and organizing all your debt from the lowest amount first. Now I talked about Ping Lois not first and then working your way up to the ice melt for a lot of different reasons. But I've found that not only you know anecdotally, because I've tried both myself, that this works a lot better and a lot faster, and people that I've talked to and then I know, tell me the same thing that this method works a lot better, too. So just like anything else, you're gonna work on pain or just like the other one. You're gonna organize them, obviously. Then you're gonna work on paying your lowest amount off first. And I'm gonna go through an example with you in the next lecture so you can actually see this method in, you know, in actually action. Ah, and then you're going to still pay the minimums on the other ones like we talked about, and then you're gonna rinse and repeat. So say you have five cards. One of them has the lowest amount of, like, 300 or something like that. You're gonna pay that, Not first while you're still paying your other minimums, and then you're simply gonna rinse and repeat. By that, I mean, then you're gonna take your next four, and you're gonna identify which is the lowest, and you're gonna pay that one off work on paying that one off first while still paying the minimums on the other ones. The reason for this strategy and the reason I feel that this strategy works better, is because you can build momentum and you'll see that you'll see that immediate impact on your credit score. You'll see that immediate impact, you know, on your debt. You even if you have, I feel personally that you get a lot more weight lifted off your shoulders. If you can pay off an entire Carter an entire account that you basically oh, so you can only so you can focus on in on zero in on the accounts that you have left. It feels like you're paying a lot more dead off psychologically, if you can simply x out a card or an account rather than pay slowly on all of them, or simply pay the highest you know interest rate first. Because if you're paying the highest interest rate first, a lot of times that will be one of your highest, you know, accounts of your highest cards, and then you simply won't see that that credit. You wouldn't see that momentum, and you won't allocate the extra money needed to pay off the other one's faster because you won't be seeing that progress. Life's about progress. Regardless of what you're doing. Life is progress, okay, that best that's just the reality of it. So if you pay off your little this one first, you'll see that immediate impact. You'll see that progress not only on your credit score, but psychologically you will feel better. You'll feel like you're paying off more debt, and that makes a huge impact. And that's something that a lot of people overlook. So I'm gonna go into the next lecture on explain, You know, an actual we're gonna actually, you know, make fake credit. You know, cards and stuff like that will pay them off. And I'll show you my strategy and how to implement this so that you can take your debt and your cards and do the same exact thing. 4. 4)Example Plan of Action: All right, So now we're gonna form our example Plan of action. And I kind of just generated an example here of six cards that you might have. I'm sure in a similar situation, you know, it might be, too. It might be 10. It might be six, regardless of how much it is, how much is on either one or any of them. I mean, you know, this will work for you, and I'm telling you, this is easy, but it's the best way to do it. Because you'll be. You'll be seeing progress. You'll be Xing cards off the list and you'll see you know an immediate impact on your score . More so because you won't have that card. Now, don't throw these cards out, then close the accounts. Just simply pay them off because you're gonna want that revolving credit availability later that something will get into when you start talking about craft. So if these were you examples of six cards, you have a visa that you have 3460 bucks still remaining on you discover that 789 a Macy's of about 1000 9 90 Sorry, 1000 90 not about a Nordstrom card of 2400 a MasterCard of $5610. A target card of $3000.4 or $3004 can't speak today. So what I would do if this was my was was my situation. I would simply, um, organized them into a payment order. And then I would pay off the Discover first. What I would do then is I would I would figure out the minimums from a Macy's Manar's from my target, my Visa and MasterCard. And when they were dio, I would allocate money to pay all four of the off. Um, sorry. All five of these off. And that, uh, the minimums. Sorry. I misspoke. I would allocate the money to pay the minimums on all five of those off. And then whatever extra money I had to pay, I would put it all towards my discover. Let's assume that within a month we paid off the discover and we hang off the minimums, but they credit relatively stayed the same because of the, you know, the interests or whatever. So we'll say that the Nordstrom actually went down because this doesn't actually have interest yet? We'll just assume so. We paid 300 off on the Nordstrom, and we paid about 60 off on the visa. No, the rest of them are still the same now, the same thing you would do the next time that you that you. Soon as you accept one of those cards, you would figure out the Nordstrom's minimum. The targets minimum, the visas minimum and MasterCard's minimum, and you pay them off for that month. And then you'd out. Get all the rest of your money to x out your Macy's bill. See the progress that we're starting to make you still have. You know your highest ones, for sure, but you're Xing out cards and you're getting that revolving credit, which I'm telling you and you'll understand later is very, very important for your credit score. You're making a huge impact that that you'll notice a lot faster whether if you do it this way, you know, relative to if you did it, the other method. I'm telling you, this method works great so that it's the same thing. You know, Target Visa, MasterCard figure out the minimums except the Nordstrom, the same thing figure out your visa MasterCard. You get the picture. That is really the method. In a nutshell. It's very, very easy, very easy to implement, and you can do it, too. And if you start to, you know, see progress and build momentum, Life's all about progress. Like I said, you know you'll want to allocate more money. You'll figure out more ways you'll get creative. You know, if you start paying off your highest interest rate, say that was the MasterCard, for example, at 5600. Or maybe that was even just the target. You wouldn't necessarily be ableto potentially pay your target off, depending on how much you're making, uh, you know, within a month or two and you wouldn't necessarily see any progress. So figure out you're your situation organizer, that into the amounts and then pay the minimum off on all the other ones, but your lowest and work on peg your lowest off first and then continue to rinse and repeat like we talked about and you will see progress. You will see improvement on your debt and you will see improvement on your credit score. OK, just little caveat before I end this you see these examples? Obviously, these aren't my specific examples, but similar to my specific examples when I add debt. Okay, now, one little caveat that I think is important to understand is you have a visa card and you have a discover card. You know, it's important to stick to those big credit companies. If you have a card, don't I? Repeat, don't if you if you do have to have a car like that where you don't maybe you're just getting into debt or whatever your cases avoid the store cards, like the Nordstrom cards and the Macy's cards. They always that's, ah, promotion that a lot of stores will run. They give you this or this to get you in and sign up for a car. Maybe it's to get, you know, points. Or maybe it's to get coupons. Maybe it's to get, you know, money off your first purchase. Do not do it. It's a trap that high interest rates they might not charge right away. But the highest interest rates in the game right now are on store credit accounts, and they're the hardest to pay off. Okay, so avoid them if you if you haven't already it had them. If you do, you know it's not the end of the world, but, you know, for the future. Now, I just want to kind of bring that little caveat to because it's something that I learned anecdotally, that is very, very valuable to you. 5. 5)The Importance of Credit: okay, So really fast. I just want to talk about the importance of credit and your credit score. We're gonna jump into the actual credit information now. Now that we'll talk touched on, you know how to get out of debt in forming a plan of action. Well, the importance of credit is huge, especially in today's day and age, where a lot of business is done through credit. You know, like I alluded to in the course intro. If you have, you know, any aspirations relatively soon to purchase a house to rent an apartment, to buy a car, to lease a car, to do business or open a business or any number of things that could be dealt with across the spectrum of credit or credit reports, then this information is going to be huge. You know, if you know all this stuff already, you know, maybe there's something in here that you could that you could, you know, kind of gather that could help you. And and that's something you didn't know. If you don't, this is thought that you should know. Okay, You should You should definitely understand what goes into your credit score and what makes up your credit score so you can wanted to improve it because credit is is literally the lifeblood of your You know your finances nowadays, So credit is basically what businesses are going to use to analyze whether or not you're a good partner. Do business with or I e lend you money, you know digitally. Okay, so there's three credit bureaus. Obviously you have equal fax experience and Trans Union, and they all basically monitor your credit and provide credit scores on when people do searches and figure out your credit credit scores. These are the bureau's that beer as well the bureau's that they're going Teoh to figure out your credit score. OK, so it's really that simple. You know, you need to know what goes in your credit score, and we'll talk about that in the coming lectures, and I'll talk about you know, the specific parts of your credit score and what you can do to improve them if there are already, you know, kind of low or what you can do to maintain them if they're already high on and then furthermore, in the third section will get into you know what you can do to improve your credit score as a whole by dissecting each factor and improving them. Because really, you don't You don't want to try and meet the tricks to improve your credit score because they won't necessarily help you in. A lot of them can actually backfire. Okay, I'm telling you, from anecdotal experience, there's no trick or, you know, overnight or monthly, you know, solution that's going to fix your credit score. Anybody that tells you that is lying to you and they're trying to take advantage of you because there's not an overnight, you know, theory or strategy that you can implement that will do it for you. It's about building long term trust and long term credit. And then, you know, kind of using your knowledge to put yourself in a better position to start, you know, improving that over time. Now it's not gonna take a year or two. You know, often things stay on your credit score for seven years, and that's true. But you can start improving your credit as soon as you you know as soon as tomorrow. If you have this information, there's a lot of things that you could do and take advantage of, and I'm gonna get into them. Ah, in the coming lectures, okay, 6. 6)Components of a Credit Score: All right, So now we're gonna talk about the five major components that make up your flight Go credit score. And these are important to understand and know to the A you can, you know, pay down your credit and get you know you're a better credit rating. But also said the you know, for the future so you can kind of not I hate the word manipulate because that kind of implies that there's kind of a hack or secret. Or, you know, a trick that you can do that will help increase it if you like. I said before, if you hear any of those from anybody, you know your alarm bells should be going up. But it's important to understand it. Just like when you're paying taxes, the better you understand the law. You know, the the West taxes you could potentially pay. It's the same with the credit score. OK, so the better you understand the components that go into your credit score, the better you can utilize that and utilize your knowledge about them to, you know, make them work in your favor the best that you can. Okay, so the first thing we're gonna talk about is the total accounts. Okay, and basically what total accounts are is it's pretty self explanatory. It's the amount of accounts that you have open no credit wise, and creditors basically want to know that you can responsibly manage a mix of credit times if you you know you only have one or two, but you have a perfect, you know, credit history or anything. That's not necessarily the best indicator always of, you know, good credit because you don't have a mix of different credit. So whatever you dio, sometimes you don't. You don't wanna open too many cars at once, of course, but over time, the age of credit in the credit and the age of your credit cards is a good indicator and thing to keep in mind as well. So over time it is important to open a mix of credit cards and you know, but just make sure that you keep responsible on them. So if you want to open one here and there, if you have an open one in a while and you know, just make one charge and then pay it off and then simply cut that up, that's a good. I think that's a good piece of advice to dio that were you still benefit off that open credit? Your revolving credit, Which is another factor we'll talk about in a little bit. Well, you know, increase obviously. And it will help increase your credit score over time as that account ages and there isn't a balance on. Okay, Something to keep in mind. The next is the length of credit, You know. How many years have you actually had credit? The longer, obviously. Just like we talked about. With the total accounts, the longer you're you have credit, the better, the more that will have an impact on your credit rating. Okay? Something also to keep in mind. Now, the next things enquiries and what enquiries are are the amount of enquiries that you know , Basically, lenders or businesses are searching for the amount of times that they're searching for your credit. Your credit score. OK, sometimes this having an inquiry here, there can actually, and this, you know, don't take this to heart to too much, but can actually help your credit score, but only slightly and for a period of time. Okay, If you have too many enquiries at once. Suppose you you're tryingto apply for five different credit card this month. That's going to have a negative impact, and five is probably even hot. I wouldn't even say apply for two or three. Okay, you want to kind of do this over a period of time if you're applying for credit cards, A big indicator of risk when lenders are looking at your credit score is too many enquiries on credit, you know, on different credit cards in a short period of time. That basically lets them know that you're desperate. It's not a good look. So enquiries or something to keep in mind when you're when you're dealing with your credit score? Okay, the next And this is probably one of the most important, if not the missed payments is obviously the most important my mind. But revolving utilization is the second most important in my opinion. Okay, uh, your revolving utilization is basically you know how much you owe on all your accounts. But how much you know you have left. Okay, so let's say that you have a limit of 5000 but you're But you're almost Max on that. That's gonna hurt your revolving credit, your revolving utilization score because you're close to your max. One of the persons that one of the people that person's I can't talk one of people on a network with actually turned me on to the law of 1/3 which is basically that if you can keep all your currents below 1/3 that will really help positively impact your credit score . So I don't know what 1/3 of 5000 is, but you can obviously do the math. It might be like, you know, 1500 or something like that's probably little bit more than 1500. But with that being said, it's something keep in mind, you don't want to be basically what it is, is it is the amount, uh, far game out far the amount that you're away from your limit on each card, and each of those obviously plays a factor, and you're evolving utilization. Okay, so the closer you are to your limits on all your cards across the platform, the lower your credit score will be because you're a bobbling utilization score will go down, and that's a big indicator. I believe it's like 30% of your actual credit score. Finally, it's miss payments. Now, this is self explanatory. You know, the amount of missed payments that you've you have obviously, is a big indicator if you've never missed the payment. You know, obviously, I would assume that you're probably not watching this course, but, you know, more power to you if you have missed the payment or you haven't missed a payment. And, you know, you're just trying to pay off death, and then you're in a great position, okay? Because you can implement these methods. And you could, you know, start making money with some of the other courses and stuff like that and really start to pay off your credit and that, you know, you're really set for a while, But if you missed the payment, it's not the end of the world. Ah, big majority of Americans, You know, I have missed payments I have as well. But the thing that you want to keep in mind and I touched on this before is you want to avoid going into collections. We want to do everything that you can to avoid going into collections. Because collection, you know, just like a missed payment will stay on your your credit score for seven years. Now. It's not the end of the world. If you have an account going collections I have myself on and you can see your your score slowly go back up. And I did too. But it's really gonna hurt your your account, Mother, your credit score much more high, like much more If if you let it get an account, go into collections rather than if you just simply, you know, paid it off for Mr Payment here and there. But then, you know, slowly made a payment. So even if you have to talk to them and make you know a $30 payment of $50 payment to avoid collections, do that, Okay. But you obviously, ideally, don't want to be missing any payments, missing payments, and, you know, collections and stuff like that is the biggest factor. The single biggest factor that's going to go in your credit score. That's something that lenders don't want to see. Because if you have a history of missing payments to too much, it's gonna be a big indicator that they should not lend you money because there's a potentiality that you might not be able to pay back. Okay, the two biggest ones are obviously missed payments and revolving utilization. But the other ones play a big amount in a big factor in your credit score and what makes it up as well. Okay, so it's important to understand the things that go into these, you know, replay this lecture if you really need to kind of delve into it deeper and take some notes . But it's important to understand that these five things on the main factors that the main components of your credit score, but really the most important, obviously, like I said, our first missing payments and then revolving utilization. 7. 7)How Fast Will My Credit Rise: okay, real fast. It kind of just wanted to touch on. Ah, question. I get asked a lot, which is how fast your credit will rise. You know, once you start to pay off your debt and how fast it'll it'll rise, months is all paid off. Okay, so there's no clear, definitive answer to this. Obviously, my anecdotal experience tells me that it's relatively fast. So when I say fast, I don't mean overnight. I don't mean necessarily a week necessarily. Okay, in some cases it can be, But it's definitely not gonna take, you know, a year or two years what you've been led to believe your credit will actually significantly rise once you start paying off a lot of your debt. And you know you're taking actions to do so and especially once you pay off all your debt and you don't have any of that left and you're bombing utilization kind of, you know, really increases that score. And you obviously the farther away from your missed payments you get and all, and so on and so forth, your credit will really start to rise really fast. Okay, But the key that you have to remind you That you have to remember is that your credits not gonna rise overnight. How does your credit actually rise is a good question that to bring up here because your credit doesn't rise just simply because you paid off a payment or simply because you know you're doing better with your payments or you paid off a collections or something like that . Your credit only rises when these collection agencies or your creditors actually notify the three bureaus. Okay, So once the three bureaus get notified and actually received the information that that you know, the creditors where the lenders are giving out, then in that situation they will put that and that will reflect on your score. So only until then does that do you start to see those things actually reflect on your score. OK, so that's something to keep in mind. If I had to put a timetable on it, Andi paid off all your debt. You might start to see. You'll see significant increases the first time that the bureau's actually, you know, received notification from those those institutions that you've paid off all your debt. Okay, but that could be, you know, weeks that could be a month or two. It just depends on when they actually receive it. There are things that you can do to call your your collections agencies and ask them to basically send out a letter. Or you could basically send out a letter to yourself to the bureau and let them know there's no overnight night cure. Basically, okay, we could talk about this all day. There's a bunch of different strategies and techniques that you could get into, but really, you'll start to see it reflect anywhere from about a week to two months more. Most of the time, it's it's closer to about a week or two, all the way up to about a month. Okay, to ends is really two months is really pushing it, but that's what you could really expect once you start to pay off your debt. As you start to pay it off, it will. You know you'll start to see it monthly bumps in your in your credit score as you go, and that will obviously reflect over time 8. 8)Keeping Records of Your Payments: Okay, The next thing I want to touch on is something that's really important to remember. And I cannot stress this enough, okay? And that is that it's important to keep records of everything. You know, whether you take pictures whether you print out your you know, your bank statements that show your payments, whatever you want to do, however, you want to do that. Um, make sure you keep records of everything. Okay, regardless of whether you're in collections like the collection agencies have, um, you know, or you're just paying your creditors simply keep records of everything. Okay? You it's not. It's important to do this. A So you Can you have the ability dispute later if you have to, um, and be just because, you know, you should never just trust somebody with your money, you know, always follow up. Okay. You'd be surprised how often people see that they make a payment, especially with collection agencies. But I've heard this happen with creditors as well on. And then that doesn't end up showing and reflecting on their statement because for whatever reason, it just you know, it wasn't you know, it just doesn't show. Okay? So This happens a lot more now with checks and not necessarily electronic payments. But I've have heard that it happens with electronic payments, you know, especially with collection agencies. Now, this is more the ah, the out liar. Not the norm. Okay, But I do want to stress that it's important to keep records of everything because you do not want to be the outlier. Okay? You just want to make sure that you know when you're paying your bills off, that you're getting credit for it. Okay, Now, this is definitely important when you're in collection A for the simple fact that you know you don't want that compound interest to keep piling up for death, that you've already paid off. That's huge. It's a lot of money that you're giving away and giving back if you're not, you know, basically taking advantage of that and keeping track. Okay, It's not their responsibility necessarily to keep track of your money. It's yours. And that's something that it's a very, very, very important to remember 9. 9)Should You Settle Your Balance: All right, guys, this is really important one. This is for all the people that are have accounts going to collections. If you haven't, you know, feel free to skip this lecture. Or if you want to kind of just get some information on credit, Will collections for the future. You know, in cases ever potentially happens to you. That might be a good idea, but you might want to replay this one and kind of go back and make sure that you get everything because there's a lot of value in this that I want you to understand. And this is something that I learned anecdotally through experience that I don't want you to have to learn the hard way as well. Okay, So a big question that I get asked by a lot of people is should you settle your balance, You know, with a collection agency, and basically, if you don't know what settling the balance is, And if you're watching this, I'm assuming that you probably dio basically settling the balance is when a collection agency will either send you a letter or, you know, call you or whatever the case. Maybe they're trying to get ever they can. You know the fact they make money by getting the biggest amount of money the lump sum. They're interested in getting the most money money from you as possible in the shortest amount of time. That's how they make their money. Okay, so they would rather you pay. Let's say that you owe them $2000. They would rather you pay, you know, 1500 or even 1200 sometimes on that right away to them because they bought that that $2000 debt at a significant discount from your your first creditor. Okay, because the first creditor couldn't get in touch with you to get their money. So they ended up selling it to a collection agency for pennies on the dollar a lot of times . So that collection agency will still make a lot of money, even if, you know, sometimes they're getting 1200. So big question I get is, should you sell your balance? Because when you settle ah, lot of times the collection agency to entice you to pay money will basically say, Hey, listen, we know that you have, you know, for this example, they'll say, Hey, we know that you have $2000 of debt, you can pay it off in a number of ways to us. We're gonna help you out. And basically, what they do is they say, you know, you can pay $1200.1 lump sum payment. And you know what the $2000 debt off our books on. That's intriguing to a lot of people because you're thinking like, hey, you know, I can pay 1200 bucks where I really oak 2000 and yes and no. And I'm gonna preface this by saying, You know, just hold on, Wait for me to explain. A lot of times will also say, you know, you can pay two sons of you know, 600 bucks over or you know to sums of 6 50 to basically pay 1300 bucks over the span of like, two months or something like that and pay to lump sums and gently works that way. And that sometimes will offer you know more, you know, payment terms in like, six months or 12 months. They basically just want your money as fast as they can, and as much of it as they can get in that time frame. They're interested in closing your account. Basically, to pay off that that ah, payment that they made make the most amount of profit. Assassin, they can't there just a business like anybody else. Okay, so the important thing that that I want you don't understand to some this question up in one simple word, it's No, no, you should not settle your account balance in 99.9% of cases in my opinion, and I were in this anecdotally, the first and foremost reason that I want to stress on you is right Shouldn't settle. Your account is a lot of people will say, you know Oh, you know, isn't the damage already done? OK, and yes, it definitely is. The damage is already done. If you have a collection account, go into collections, that account will stay on your on your credit report for seven years. Okay, Uh, in some cases, that won't if you catch it early and often you negotiate with them. But that's that's probably, you know, one out of 1000 people. So I'm not gonna touch on that. It's beyond the scope of this lecture, but the damage is definitely already done. Okay, So people might say, you know, shouldn't I settled? Because my the damage is already done to my account. You know, I should pay the least amount of money. Why would I pay 3000? I could pay 1200. Makes sense in theory, right? But what a lot of people don't understand is this last point here that if you settle that collection agency could very well and this happens in a lot more cases than you realize could vary. What? Let's say you owed 2000 and they settled with you for 1201 lump sum payment. You thought that you just made out right? Because the damage is already done on your account. But there's something that that that that that damages only done over a seven year period. So that was going to stay on your account for seven years anyway. But what that collection agency will do most of the time is turn around and sell the remaining 800 bucks that's still on that on your debt to another collection agency. And that called the other collection agency, might pay them 200 bucks, so they just made 1400 on that tooth on that original payment of whatever they made. And, um, you know, that new question agency gets that debt of 800 so you very well could get another a letter in the mail that, you know, basically says, Okay, now, you old 800 from that. That $2000 that you settled from another question agency happens to people all the time. They're completely blindsided. It happened to me. I learned it the hard way. Okay, so I do not want this to happen to you now. Obviously, that's annoying, and you don't wanna have to do that twice. But the more important factor that you're forgetting is that that new collection, agent agency and that new debt stays on your credit report for another seven years. So what you could have just dealt with initially? You know, basically, you pushed back to extend your bad credit into, you know, into the future of longer than had to be. And that's the main point that I want to touch on here. Because the main factor with settling a debt is, you know, the amount of time That's a last with from when you paid it, either or that you recognize that last that. So if you picked up the phone and you said, Hey, yeah, I know, I know. I owe the debt. I don't I don't have the money right now from that last time that you that you acknowledge that payment or, you know, maybe, if so, but let's, for example, Okay, let's say it's 10. 31 2017 Ptolemy and happy Halloween, everybody, Um, I'm finishing up this lecture for you cause I really, really this content. I think it's gonna help a lot of people. But let's just say that a collection agency called me today on I still owe debt, Okay? And I acknowledge that so So basically seven years from today would be the the last day if I didn't talk to that collection agency for the rest of time where I paid it off today, that that that debt would be on my all my books for the next seven years, regardless of what I did. Okay, so that's something to keep in mind now if I paid that off in two months, but then they ship it to another collection agency Well, then, that's just prolonging the bad credit instead of just paying it off ast fast as I can now, there are some cases where you simply just want to avoid paying the balance all together. Now I'm not. I'm all for paying your debts, Okay? I think there's honorable. I think there's something in that I'm not suggestion suggesting to anybody character wise that it's a good thing to do. But with that being said, there's there's a fine line between being smart and, you know, being character rich. Okay, And if you have, if you have a collection agency that's on, that's after you for money, basically, and they've been after you for two or three years. Or maybe it's like if they're only after you for two or three years, that, yes, you should definitely pay it off and work to pay it off. If you had a collection agency on your on your back for the last six years or so, then and you haven't recognized that debt when the only time I would say to avoid paying it would be, you know, somebody close to that seven year gap. If you think maybe it's like five or six years into it. And you haven't acknowledged the credit in a while and you just ignored it. And you don't plan on buying a house or like our leasing a car, anything, Anytime soon. Then maybe you should just let the debt run out because you're not gonna have to pay it. And it will eventually just, you know, seat cease to exist on your credit report, and your credit report will skyrocket as soon as that Seven years this up. Okay, so that was a lot. I got a little bit carried away. I got you know, I said it a little bit fast, So if you need to, kind of, um, you know, go back and replay it, Please. Dio there's a lot of information in there, but I really think that it's important to understand this stuff because it really makes a big difference when you're paying off your debt and the strategies that you use and you know how to address it. The big thing that I want to sum this lecture up with is you know the question, the answer to the question Should you settle your balance with the question agency in one short, simple answer? No, 99.9% of times you should not 10. 10)Course Project: Alright, guys. So I really hope you enjoyed the course. I want to, you know, steer you in the right direction. So as we talked about you can get your free credit report every 12 months. And this is a vital step to really kind of, you know, protecting yourself long term to see if there's any discrepancies. You know, you want to get ahead of them while you can, you know, address them early and it will really help you see, you know where you're struggling, where you can prove and really kind of is the basis of, you know, starting to measure, because what could be measured can be improved. So for your course Project Goto annual credit report dot com and simply a crust your free credit. Well, sorry. Request your free credit report and then start looking at it. Now if there's any discrepancies, obviously you can handle them as they come, but the majority of people it will at least show you where you're at and where you can improve. So I hope you enjoyed the course and I'll see in the next