How to Ruin Your Credit Score - And FIX IT!

Summary

The transcript summarizes a financial advice podcast hosted by Ralph Estep Jr. It covers how someone can ruin their credit score through late payments, high utilization, and ignoring notices, as well as solutions like paying on time, reducing balances below 30% of limit, addressing collections, and rebuilding history. Ralph emphasizes the crucial role of credit scores in accessing loans and the importance of timely payments. He warns against credit repair scams and says scores can recover with dedication using authorized user accounts or secured cards.

Chapters

Introducing Podcast and Host Ralph Estep Jr.

The host Ralph Estep Jr. introduces the Ask Ralph financial advice podcast brought by Saggio Management Group. He promotes his book on personal finance before returning to the podcast topic on ruining and fixing credit scores.

How Sarah Ruined Her Credit Score

The story of Sarah is shared as an example of how someone can ruin their credit. Mistakes like late payments, maxing out cards, and ignoring collection notices damaged Sarah's score and loan access.

Solutions for Fixing Your Credit Score

Tips are provided to fix credit scores including paying on time via auto-pay, reducing card balances below 30% of limit, addressing collections, and rebuilding history with secured cards or authorized user accounts.

Importance of Dedication and Avoiding Scams

Ralph emphasizes credit improvement takes time not overnight fixes. He warns against scams and notes scores can recover in months with dedication using legitimate strategies.

Offering Resources and Closing Remarks

In closing, Ralph offers Saggio's services for personalized guidance and reminds listeners that financial issues don't need to be complicated.

Action Items

1. No explicit action item identified.

Welcome to the Ask Ralph podcast. We're listening to an experienced financial professional can help you make sense of confusing questions current headlines and industry trends about taxes, small business, financial decision making, investment strategies, and even the art of proper budgeting.

As Ralph makes the complex simple by sharing his real world knowledge with all things financial. Now here's your host, Ralph Estep Jr. Welcome back to another episode of the Ask Ralph show. I'm your host Ralph Estep Jr.

And today we have an important topic that affects many of us, that is credit scores. In this episode, we'll be discussing how someone ruins their credit score and how to fix it. This podcast is brought to you by Saggio management group, Inc., your trusted partner in financial management.

So stay tuned for more information about how to ruin your credit score, but more importantly, how to fix it. Ask Ralph will be right back. Hey, I want to take a few minutes and just tell you about the latest book I've written.

The name of the book is Mastering Your Finance is your personal guide to financial freedom. And listen, folks, it's not just a book. This is an actual roadmap to securing a thriving financial future.

As a season to count and I pen this book to put the power of financial planning right at your fingertips. This book will transform your financial landscape from a confusing maze of numbers and jargon to a clear and well trodden path towards prosperity.

This book is written for every potential user from the first time person trying to get their finances in order to a well -seasoned person who's been trying to do this for a long time. So what I want you to do is to discover the profound impact of strategic planning as you journey through real life examples, practical tips and insightful advice.

This book is more than a guide. It's a lifeline to financial literacy and independence. This is a way for you to take control of your financial destiny and embrace the freedom that comes of financial stability.

This book is an essential read for anyone seeking to navigate the world of personal finance with confidence and ease. The book is available right now on amazon .com. You just search for the name Ralph Estep

and you can get it either on paperback or on Kindle. So check it out when you get a chance. And now back to the podcast. And like I said before folks, today we're going to talk about how someone ruins their credit score but more importantly how to fix it.

So this is an episode that I encourage you to share with your friends, share with family members who may have got some credit score struggles. You know, I've seen this in my own life, you know, dealing with going to get financing and, you know, in my tenure working as an executive at a credit union.

These credit scores are no joke friends. Your credit score plays a crucial role in your financial life. It truly determines whether you can get approved for loans or credit cards and affects the interest rates you receive.

But we all know that sometimes life happens and our credit scores take a hit. Today we're going to explore how someone can ruin their credit score, but more importantly provide some great ideas on how to fix it.

So let's start by sharing a real life example of someone who faced challenges with their credit score. Let's meet Sarah. She was a recent college graduate, excited about starting her career but had little knowledge about managing her finances responsibly.

Sarah made some common mistakes that led her to ruining her credit score. What were those mistakes she might ask? Well, let me tell you. Number one, late payments. Sarah often forgot or neglected to pay her bills on time due to a busy schedule and lack of organization.

She also had what we call in the industry high credit card utilization. What does that mean? She maxed out several credit cards without realizing the impact it would have on her overall credit utilization ratio and therefore her score.

And the third thing she did was she ignored debt collection notices. Sarah went to the mailbox, saw these notices and pretended like they didn't exist. She ignored debt collection notices instead of addressing them promptly or seeking professional advice.

These actions resulted in a significant drop in Sarah's credit score, which made it difficult for her to secure favorable loan terms or even rent an apartment. So now that we understand how someone can ruin their credit score, let's focus on solutions for fixing it.

And these aren't complicated folks. They're really pretty straightforward. And the number one thing, pay your bills on time. It's really that simple. Pay your bills on time. Consistently making on time payments is crucial for improving your credit score.

Well, how do you do that? Well, you set up automatic payments or use reminders to ensure you never miss a due date. Look, the truth is, even with a credit card, set up an automatic payment even if it's for the minimum balance, because then you will never get yourself in a position where you've missed that payment.

The second thing you want to do, reduce your credit card balances. High credit card balances can negatively impact your credit utilization ratio, say that 10 times over. You need to aim to keep your balances below 30% of your available credit limit.

What do I mean by that? So let's use a simple example. If you've got a $10 ,000 credit card, you never want that balance to be over $3 ,000. This will directly impact your credit score, so keep it below that 30%.

Number three, you need to address collection notices. Don't hide from them. When I used to run a credit union in Newark, Delaware, when I went in there, we had an issue with collections. And the first thing I thought of, you know, do people really want to pay their bills?

And I found out, you know, after talking to people, yes, they really want to pay their bills. So one of the things I did was I renamed our collections unit to member advocates. So these people on the other end of the phone that are sending you or talking to you or sending you collection notices, they really do want to help you.

They want to get paid. I mean, that's the bottom line, right? But they are there to help you. So if you receive debt collection notices, don't ignore them. Don't ignore them. I'll say that a third time.

Don't ignore them. Take immediate action by contacting the creditor or seeking professional advice to resolve the issue. It's as simple as calling them and saying, listen, I just messed up. I forgot to make a payment.

Can I make a quick payment over the phone? Or let's say you can't afford to pay them. A lot of these places have workout arrangements so that it won't impact your credit in a negative way. And therefore, destroy your credit score and therefore destroy your ability to borrow in the future.

And number four, and this one isn't complicated either, establish a positive credit history. Building a positive credit history is essential for improving your credit score over time. If your credit score is real low, here's some things you can consider.

Consider opening a secure credit card or becoming an authorized user on someone else's account to start rebuilding. I've seen many people who have gotten to the point where they're declared bankruptcy and within six to 12 months of declaring bankruptcy had credit scores that had recovered because they took active steps to get their credit file going again.

Now, remember, repairing and rebuilding your credit takes time and effort. It's not an overnight fix. You're not going to go to a website or pay some credit score guru. Stay away from those people because they're scoundrels and scammers.

Let's just talk about that for a second. These people say, well, I can fix your credit score overnight. That's not true. It's all about taking time, repairing, and rebuilding your credit over time. But it's absolutely possible with dedication and the right strategies in place.

If you find yourself struggling with these steps or need personalized guidance, don't hesitate to reach out to professionals like Saggio management group. We can provide expert advice tailored to your specific situation.

But be very careful. There are a lot of people out there that take advantage of people with credit issues. Well that wraps up today's episode of Ask Ralph. I hope you found this discussion helpful in understanding how someone can ruin their credit score and how they can fix it.

As always, if you have any questions or topics you'd like for me to cover in the future, please feel free to reach out. Like I've said, askralph.com or Ralph@askralph.com. You can send me an email.

If you know somebody that has credit struggles, I encourage you. Get them in contact with me, share the podcast with them, share our website with them. We have real tools that will help them. So until next time, stay financially savvy.

And remember, this broadcast is brought to you by Saggio Management Group, Inc., providing comprehensive financial management solutions for individuals and businesses alike. Thank you for joining us on the Ask Ralph podcast.

And with a simple click to subscribe, we'll invite you back to our next episode. And remember, financial issues don't have to be complicated. Just Ask Ralph. The information contained in this episode of Ask Ralph is based on data available as of the date of its release.

Saggio Accounting Plus and Ask Ralph Media, Inc. is under no obligation to update this content if changes occur. Applying this information to your specific situation requires careful consideration of all facts and circumstances, and any information provided is not to be considered as financial, tax, or legal advice.

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