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Speaker 1: You know, to the tune of about fifteen million Americans,

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this should have a very positive impact on their credit reports,

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credit scores, credit ratings. It's about forty nine billion dollars

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in total debt that's being reported, So it's an awesome thing.

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One of the projections is that they're thinking, you know,

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when you look at what's going to happen with their scores,

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and I think two things. A, it's going to be

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an even better and greater impact than what they're forecasting.

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Speaker 2: You're listening to Carrie Let'sa's Financial Survival Network where you

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get valuable information you just can't find anywhere else to

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thrive in today's trying times. You need the Financial Survival

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Network now more than ever. Go to Financial Survivalnetwork dot

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com and get your free newsletter and gift. Financial Survival

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Network now more than.

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Speaker 3: Ever, and welcome. You are listening to the Financial Survival Network.

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I'm your host, Kerry Let's. Hey, we're in mid January already,

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can you believe it? But things are happening. New administration

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coming in old one, leaving old one, trying to do

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as many things as they can before they are shown

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the exit, which is imminent. But perhaps one positive thing

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that they're doing is eliminating finally, medical debt from your

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credit report. And what does that mean to you? How

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does that help you? Well, our good friend from better

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qualified dot com, Paul Oster, is with us now, Paul.

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So this is a victory for consumers, isn't it.

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Speaker 1: This is probably one of the biggest victories for consumers

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in a couple of decades. So it's been a long

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time coming. They've they've you know, modified and played around

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with this ruling for quite some time. That the message

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was clear from the beginning. They you know, the administration

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understands that medical debt shouldn't really continue to harm a

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consumer's credit rating. There's been numerous studies and surveys and

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all sorts of things that were done. It proved someone

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who you know, has a medical debt collection. Unfortunately, usually

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they are a collection account by the time it winds

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up on some mu's credit report is not indicative of

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who they are as as a consumer and their credit rating.

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So this is a big move.

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Speaker 3: Yeah, it's kind of like they took tax leans off

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a while ago, because it's not a consumer debt, and really,

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when you get down to it, hospitalization or medical treatment.

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It's not something you as a consumer, said, Oh, I'm

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just going to blow a fortune on my credit cards

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and you know, my credit score be damned. This is

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something you had to do or your life could be

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in jeopardy.

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Speaker 1: Right, absolutely, So you're talking, you know, to the tune

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of about fifteen million Americans. This should have a very

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positive impact on their credit reports, credit scores, credit ratings.

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It's about forty nine billion dollars in total debt that's

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being reported, So it's an awesome thing. One of the

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projections is that they're thinking, you know, when you look

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at what's going to happen with their scores, and I

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think two things. A, it's going to be an even

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better and greater impact than what they're forecasting. So right

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now they're saying the average person is going to see

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a twenty point jump in their scores. Look, I've been

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doing this for over twenty years. If somebody incurs a

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collection from a medical debt, it could easily lose one

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hundred points. So I think the score jumps are going

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to be greater than what they're predicting. But even if

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it was twenty fifty points, they're thinking that that could

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lead to about twenty thousand additional mortgage approvals applications every

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single year. And that's really big because the housing market

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is one way that we could pull ourselves out of

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this funk that we're in. It's not a recession. The

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market seemed to be doing well, but the average consumer

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is not. We're treading water and we're starting to drown.

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And you and I have spoken about it. I don't

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trust the job market numbers. I think they're too easily manipulated.

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So at the end of the day, we're stuck with

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higher interest rates, inflation, cost of every goods and service

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is hosting the average household in the United States, it's

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over six hundred bucks then it was two years ago.

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So that's a lot, a lot of money on top

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of everything else. So this really couldn't have come at

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a better time. Again, the one message I want to

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make very very clear is that this is not debt elimination.

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This is not debt forgiveness. This is just a move

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by the administration, the current administration to say to the

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consumers medical debt is not going to have a negative

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impact on your credit rating moving forward, which in turn

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would have costed more money for everything else. You know,

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the lower the scores, the higher you pay for every

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single financial transaction. So again, couldn't come at a better time.

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This is a great bipartisan effort from the administration, working

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very closely with the Consumer Financial Financial Protection Bureau the FTC,

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And again this is a win for the for the consumer.

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Speaker 3: Now let's just fast forward. I want to get some

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of your forecasts here for the incoming administration. We're not

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talking politics, we're talking economics here. Is this a plus

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for consumers incoming admin?

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Speaker 1: Negative? Or doesn't matter? Well, it definitely matters. But again,

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it seems to me that people, especially if you know,

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it's hard to separate church and state and politics and

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the economy. But people look at the markets and you know,

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the growth, our GDP and all all this stuff. But

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at the end of the day, I look at it.

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You look at it from the consumer side of things.

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So until we can get wages, you know, caught up

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to where they should be, the cost of living, you know,

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it's it's really out of whack. So somebody asked me

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the question the other day and he said, Paul, when

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was the last year that we actually had a good economy. Well,

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when you look at all on them. I'm thinking you

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got to go back to like the seventies, because you know,

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when was it When was it more affordable for the

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average consumer to buy a home, not just by the home,

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maintain it, you know, fuel it put energy, electric, gas,

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durable goods, washers and dryers, you know, buying a car.

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When was all of that stuff actually, you know, affordable

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for the consumer. It's been decades. It's been decades. So

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we're behind, you know, the eight ball when it comes

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to wages and you know, affordability for goods and services.

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You know, when you look at that against what the

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markets are doing, and look, I think after January twentieth,

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the markets are going to go bananas. He's so prow business, right,

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and not just domestic you're talking about foreign relationships and

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foreign trade. I think the markets go bananas. But that

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doesn't always trickle down, you know, to the consumer.

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Speaker 2: Right.

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Speaker 3: And so what about inflation though, you know, inflation doesn't

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just you don't just take a pill and it goes away, right,

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It's it's a very intractable thing that often lasts decades.

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Speaker 1: Yeah, and that's that's kind of where my mindset is.

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It's very very stubborn. We're very, very resilient where we

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continue to spend money that we don't have. So the

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market always sets the price, so it's it's almost impossible

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to walk it back once you know, price uh price

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ranges are set in place for a reasonable amount of time,

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it's almost impossible to walk them back to where they

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you know, used to be. You know, it's just a

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matter of playing catch up with with everything else. So

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I think we're in for the a little bit of

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a long haul here, you know, much longer than you

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know most analysts and and people who you know watch

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the market and and do forecasting and projections. They want

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it over right now. But like you just said, inflation's

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not just going away tomorrow. You know, the ten year

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note is at like a all time high. So what that says,

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and that's why the market tumbled. You know, at the

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end of the week last week, we might not we

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might not get one rate cut in twenty twenty five,

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And in Q four of twenty twenty four, people were

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thinking maybe four to six rate cuts, which would put

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us back into you know, maybe the five percent mark

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for mortgages, and you know, the prime rate would have

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just been so much lower, and I don't think that's happening.

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We might not get one rate cut. The jobs reports,

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the growth and the economy continue continued to almost defy

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the odds.

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Speaker 3: Yeah, well, you have to look at the rest of

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the world's doing way worse than the US. And money

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is safe harbor, you know, money looking for a safe

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place compared to the rest of the world.

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Speaker 1: Where else is it going to go?

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Speaker 3: And right, you know, since I've been talking about this show,

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he always said the dollar, the US dollar, would be

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the last currency to go. It's the best looking house

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in the city of Baltimore.

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Speaker 1: You know, No, that's it's absolutely correct. And again one

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of the safest investments tried and true, you know, decades

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and decades and decades is real estate. So that's where

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I've seen it before, where the real estate and the

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housing market has certainly you know, led the charge or

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been a significant impetus into digging us out of the

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hole that we're currently in. So I would love to

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see that happen again. Get people into homes that they

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can afford, to get approved for mortgages with you know,

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credit scores that are more indicative of who they really are,

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and that could help everything. With every home that's sold,

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there's like one hundred and nineteen indirect transactions that happened

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every single year. So if a person buys a home

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wherever that local market is, the local banks, the local

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grocery stores, you know, all of those local markets benefit

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from one person, you know, purchasing that house. And again,

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whether it's maintenance in the house, lawn care, every single

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thing that happens within that home helps drive the local economy.

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So the more the more times we can you know,

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rinse and repeat with that, the better off we're going

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to be all right.

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Speaker 3: Well from your mouth, So as far as other things

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that people can do, TOSUA try to mitigate or lessen

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the effects of inflation. What are the top three things

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you recommend? Well, obviously credit is a big driver here, right,

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so we said it before, So consumers have to understand

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a couple of things.

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Speaker 1: A most people don't know what's on their credit report.

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So one of the good hangovers and leftovers from the

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pandemic is that consumers can now check their reports on

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a weekly basis. You know BC Before COVID, consumers only

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had access to those reports once every year. So we

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went from annually to weekly, so you could literally go

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to Annualcreditreport dot com. I say this with a caution

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because a lot of I say Annual Credit Report dot com.

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You get a free credit report. People start searching free

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credit reports and you go to free credit report dot com.

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That's not this website. Annualcreditreport dot Com is the FTC's website. Again,

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you now have weekly access to those reports. You don't

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need a credit card to verify ninety nine cents a

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penny nothing. If you're on a site that's asking you

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to enter credit card information, you've gone to the wrong site.

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So Annual Credit Report dot Com is the best way

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for consumers to check the reports. You don't get your

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scores for free, which again we've been fighting this forever.

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You should also get your scores, but you don't need

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the scores. What you need is to pay attention and

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manage the information that's on those records. Your scores are

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going to change, basically, they change every thirty days when

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the bureaus update their reporting. Maybe you get your score

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from your existing credit card or something like that, but

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the information is always going to drive the scores, So

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just focus on that for now. Go through the report.

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If you have late payments, charge offs, collections. You have

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to be very proactive in your approach. So checking your

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report is like number one. Number two is being proactive

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in building a new report can literally add open octive

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positive accounts. There are credit builder accounts. There's some great

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companies out there. Self is one of them self. You

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can get secured credit cards, you could do credit builder loans.

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You could have your rental history added to your reports

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for free, by the way through self Sure. So they

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charge a nominal fee for the credit builder loans, but

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it's worth every single penny. I suggest when you if

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and when you use self and you take out a

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loan quote unquote from them, that you take the longer

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the longest term available, because you want the credit history

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for as long as you possibly can. So if you

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had the option between twelve or twenty four months, take

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the twenty four months right as long as it makes sense,

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take the longer term because it's that monthly payment history

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that's going to drive your accounts. And the last thing,

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if you have ten dollars in credit card debt, you

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have to eliminate the credit card debt. And if you

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can eliminate it, you have to work as you as

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hard as you possibly can to try and decrease it. Right,

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so we're talking about the markets and interest rates and

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all this crazy stuff. There is no better return on

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your investment than paying down credit card debt. Most people

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are up over twenty percent, some people are twenty nine percent. Right,

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So every single dollar that you decrease your credit card debt,

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it's like getting a twenty percent or higher return on

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your money. No, there's not a lot of markets that

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are producing those kind of returns. So if you have

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credit card debt, you got to try and focus on it.

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You want to get it below thirty percent of your

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credit balances. That's your first goal and benchmark, and then

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ultimately it's to you know, completely eliminate. You might want

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to try to use a zero percent balance transfer card.

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You can only do that if you've gone over the

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number and formula a thousand times and you will be

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able to pay off the new debt. Right, So you

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move money from one or two cards to a card

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with zero percent interest rate, you might get eighteen to

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twenty four months to pay that off. You have to

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because if you don't, you have now just cost yourself

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even more money because you pay a balance transfer fee

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no matter what, somewhere between two to five percent. Then

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if you don't pay it off in time, you get

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hit with all the deferred interest anyway, So as long

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as you can pay it off, and a lot of

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times people are much more successful at zero percent because

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most of the money that they're paying isn't going towards

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the principal balance. So if you can get a zero

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percent of balance transfer card, use it, only make sure

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you can pay it off before the end of the term.

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It might be a time if you can refinance. Even

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at the today's interest rates, a seven percent mortgage is

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a thousand times better than a twenty percent credit card.

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Right ork, you take a short term loan borrow from

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your four to one k borrow from a family member.

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You know, if you work, most people can afford the debt,

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right so they're paying all the minimums, but they're just

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treading water. They're not paying off their debt. So if

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you say, you know what, all my credit cards together,

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my monthly payments are four hundred and twenty five dollars

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a month, but I'm not paying off the debt. I'm

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just them treading water. So if you can borrow money

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and make that same payment four hundred and twenty five bucks.

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It might even be lower, but you'll actually start to

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pay off your debt. Then that's that's what you got

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to do. It's got to be priority one. Get out

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of credit card debt in twenty twenty five. Do everything

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in your power to do it.

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Speaker 3: So I got to tell you a funny story here.

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It's not really funny, but Mike, I have a really

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good credit score. Well I took advantage. I bought a

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new computer, you know, Apple, and basically it's like interest

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free for the next year, and you know it's a

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couple thousand bucks. Well I do it, and it raised

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my utilization rate on that card, like, you know, a

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couple thousand dollars, which made it up close to its

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highest point, you know, almost to the max. And as

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a result, I lost twenty four points off my credit

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score just from that, even though it's all high, you know,

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it went under eight hundred.

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Speaker 1: So that's it's a great point carry because your utilization

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ratio that people have to understand that your FIGHTO score

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all scoring models and your credit score has nothing to

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do with your income. Credit score is a big piece

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of the puzzle. The biggest piece of the puzzle is

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your payment history. Second biggest piece is your utilization ratio,

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and that's the difference between your credit limits and credit balances.

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So on your credit cards, it's both cumulative and individual.

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So like you saw one card, you go over that

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thirty percent is the magic number. If your balances go

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over thirty percent of the credit limits, you will immediately

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see a significant decrease in your credit scores.

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Speaker 3: Yeah yeah, and it's nothing changed, you know, nothing has changed.

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Speaker 1: Nope, you didn't write, you didn't make a late payment,

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you didn't have a collection, nothing except that utilization ratio.

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Speaker 3: Yeah, it's ridiculous. And you know, I have my old computer.

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I'm going to sell it and just pay down the debt.

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So I just said, you know what, I'll just pay

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it down today. I paid it off fifty percent. I'm

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sure the it'll bounce back up. But you really need

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to be under thirty percent, don't you.

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Speaker 1: You sure do? You sure do? And you know the

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next benchmark would be ten percent. Uh. They actually have

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a category of high achievers, and that's for folks that

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carry small balances, anything less than ten percent of the

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total credit limits. So thirty percent the first benchmark. Pay

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your pay your cards down below thirty percent, all of

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them cumulatively. But like you're saying, if you do have

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one card that is higher than other cards in terms

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of that utilization ratio, focus on that card and you've

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got to pay all your minimums and the other cards,

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but focus on that one card until you get you

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can get it below thirty percent, and you will see

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a significant point jump and an increase in your credits.

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Speaker 3: Course, Yeah, it's just kind of ridiculous because you know

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00:20:48,880 --> 00:20:52,119
it's one card. My overall utilization rate. It said it

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went up from one percent to two percent, So you know, like,

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00:20:56,920 --> 00:20:59,640
what are we talking about here? You know, predict your health.

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Speaker 1: Listen, sometimes we scratch our heads. Again, over twenty years

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00:21:04,559 --> 00:21:11,680
in this industry, I've probably personally analyzed thousands, thousands of

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credit reports. As a company, we've probably done it millions

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of times, and sometimes we scratch our heads because it

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doesn't make sense. Remember the algorithm and formula for the

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00:21:23,519 --> 00:21:27,319
FCO scoring model. It's a more closely guarded secret than

341
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Coca cola. Write the recipe for Coca cola. We know

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00:21:31,920 --> 00:21:35,799
that probably as harmful, probably just harmful as Coca Cola

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right eight. It's just a slower death, that's all. But

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we know what the pie chart looks like, thirty five

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percent payment history, thirty percent utilization utilization ratio. But there

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are times when we look at a report and something

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like that happened to you. The only change was a

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slight increase in a utilization ratio nowhere near the thirty

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percent benchmark, and the scores go down. Sometimes we look

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at reports and I say, I can't believe the scores

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are that high with bankruptcy or of short sale, foreclosure,

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charge offs and collections. So it does work both ways. Unfortunately,

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most of the time we're scratching our heads and saying,

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I don't know why the scores are so low.

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Speaker 3: These a simulator to figure out we're going to happen.

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Speaker 1: We do. We have an awesome credit reporting agency called

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Smart Credit that we've partnered with them. There's you know

358
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everyone talks about AI, Well, this credit repeat it's called

359
00:22:41,640 --> 00:22:45,279
a smart credit for a reason. The credit report does

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exactly what you're what you're talking about. It can analyze

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all of your data and make some projections based upon trends.

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If you paid this much, you're going to get this

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jump and they actually have paydown dates so or not.

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Within each billing cycle, there are certain days that will

365
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give you, you know, more bang for your buck. So

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if you're going to pay off a card paid off

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in between these three days, it's called the best paid out. Yeah,

368
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it's really it's it's really powerful. So good thing like yeah,

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but you know, and I always say this too, especially

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for for the younger generations. Uh, in today's world, they

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have access to so many free, free technologies, softwares, mint

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dot com. You've heard me mention this company or uh,

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00:23:37,799 --> 00:23:41,960
it's a great way because people don't they don't look

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at all of their finances, expenses and budgets. They know

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they get paid and they hope at the end of

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the month there's enough money left over to make it

377
00:23:51,519 --> 00:23:54,319
to the next paycheck, but they don't look at at

378
00:23:54,359 --> 00:23:59,319
at an at an analysis of your expenses. Again, where's

379
00:23:59,359 --> 00:24:02,119
the money going to come from. We're basically all on

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00:24:02,160 --> 00:24:05,599
a fixed income, So any additional monies that we're going

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00:24:05,680 --> 00:24:09,079
to you know, start this deat elimination process is going

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00:24:09,160 --> 00:24:12,920
to come from hutting expenses. Most people have no idea

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00:24:13,720 --> 00:24:16,880
what I mean, they know, Okay, I spend money on gas.

384
00:24:16,920 --> 00:24:19,839
I spend money on groceries. But did you ever really

385
00:24:20,119 --> 00:24:22,559
analyze it and look at it and say wow, If

386
00:24:22,640 --> 00:24:26,960
I didn't stop at the convenience store every single day

387
00:24:27,279 --> 00:24:31,079
to and from work, I would save myself three hundred

388
00:24:31,119 --> 00:24:34,559
and forty dollars a month. If I cut all my subscriptions,

389
00:24:34,640 --> 00:24:36,720
I would save one hundred and sixty bucks a month

390
00:24:37,000 --> 00:24:40,640
if I did so. There are ways to cut expenses,

391
00:24:40,680 --> 00:24:43,799
you just have to be aware of what those expenses are.

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Speaker 3: Let me ask you this, is there a free service

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00:24:46,680 --> 00:24:49,079
or a nearly free service available that can look at

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00:24:49,079 --> 00:24:52,799
all your cards and list all your subscriptions and how

395
00:24:52,880 --> 00:24:54,039
you can get rid of them.

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00:24:54,480 --> 00:24:57,079
Speaker 1: There are so being able to figure that out where

397
00:24:57,119 --> 00:25:00,319
you know how you're paying for the subscriptions. There are

398
00:25:00,359 --> 00:25:03,079
a couple of free things that people can do. You

399
00:25:03,079 --> 00:25:08,200
can check your Apple subscription, your Google subscriptions. That's a

400
00:25:08,240 --> 00:25:11,079
great way to figure out what subscriptions are there. But

401
00:25:11,200 --> 00:25:16,880
then if you have Netflix, Spotify, Hulu, Xbox, Roadblocks, pH

402
00:25:16,960 --> 00:25:21,720
four P one, you're paying for them somehow. So take

403
00:25:21,759 --> 00:25:26,920
a book at your statements, credit card statements, bank statements,

404
00:25:27,200 --> 00:25:30,119
figure out what you're paying for and then eliminate them,

405
00:25:30,160 --> 00:25:32,519
and again you don't have to eliminate them all, or

406
00:25:32,799 --> 00:25:35,519
maybe eliminate them all for the for the time and

407
00:25:35,599 --> 00:25:39,160
duration that you're in this dead elimination program, and then

408
00:25:39,440 --> 00:25:42,839
the ones back that you really really miss. But cutting

409
00:25:42,920 --> 00:25:47,079
expenses is really the only way without taking a short

410
00:25:47,160 --> 00:25:49,559
term loan. But even if you're going to take a

411
00:25:49,559 --> 00:25:53,160
short term loan, figure out what your expenses are every

412
00:25:53,240 --> 00:25:56,079
single month, look at a three or four month trail

413
00:25:56,960 --> 00:26:01,200
trailing and figure it out what can I cut? And

414
00:26:01,319 --> 00:26:04,039
people are always the here's the good news. People are

415
00:26:04,079 --> 00:26:08,759
always surprised at how easy it was once they took

416
00:26:08,799 --> 00:26:11,359
the first step, once they got some momentum under their

417
00:26:11,359 --> 00:26:14,960
bell and they started doing it. They're every single day

418
00:26:15,279 --> 00:26:18,119
we hear the same thing from our clients. I should

419
00:26:18,119 --> 00:26:19,680
have done I should have done it six months ago,

420
00:26:19,759 --> 00:26:21,480
I should have done it three months ago. I should

421
00:26:21,839 --> 00:26:26,319
So start the process. Take a look at your expenses,

422
00:26:26,680 --> 00:26:29,359
put a household budget together. Figure out how you're going

423
00:26:29,400 --> 00:26:33,200
to eliminate debt in twenty twenty five, specifically credit card debt.

424
00:26:33,319 --> 00:26:37,599
The other debts are kind of like, we have to

425
00:26:37,640 --> 00:26:39,599
have them right. You have to buy groceries, you have

426
00:26:39,680 --> 00:26:41,359
to buy gas to get the work. You have to

427
00:26:41,400 --> 00:26:44,119
pay your electric. You have to pay natural gas. However,

428
00:26:44,119 --> 00:26:47,599
you heat your home the energy. But most of the stuff,

429
00:26:47,640 --> 00:26:50,759
if we're going out to eat, if we're stopping for drinks,

430
00:26:50,759 --> 00:26:54,240
if all the recreation and leisure stuff, that's where you

431
00:26:54,279 --> 00:26:57,279
have to start. You know these cuts for sure, agreed?

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All right?

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00:26:58,200 --> 00:27:00,759
Speaker 3: Hey, oh it's always a pleasure. Just tell us again

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00:27:00,799 --> 00:27:02,519
where we find you. How we connect with you on

435
00:27:02,559 --> 00:27:03,200
the web.

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00:27:03,119 --> 00:27:07,039
Speaker 1: Easy enough. Just go to better qualified dot com. All right.

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00:27:07,160 --> 00:27:09,680
Speaker 3: Links in the show notes to this interview on Financial

438
00:27:09,720 --> 00:27:12,839
Survival Network dot com. We asked when you're there, please

439
00:27:12,880 --> 00:27:15,480
sign up for your free newsletter, as over sixty five

440
00:27:15,559 --> 00:27:20,359
thousand of your fellows FSN community members have. If you've

441
00:27:20,359 --> 00:27:23,559
got a question for Paul myself, shoot me an email

442
00:27:23,759 --> 00:27:28,160
klatcarrielts dot com. Paul, we'll talk to you again real soon.

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00:27:28,359 --> 00:27:29,599
Speaker 1: Thanks, Carry, have a great day.

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00:27:29,839 --> 00:27:33,960
Speaker 2: Thanks for listening to Carrie Letz's Financial Survival Network your

445
00:27:34,039 --> 00:27:37,880
solution to today's trying times. For the latest, go to

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00:27:38,039 --> 00:27:42,480
Financial Survivalnetwork dot com. Financial Survival Network

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00:27:42,759 --> 00:27:44,440
Speaker 1: Now more than ever