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Understanding Credit Reports and Scores with Experian’s Rod Griffin | Ep. 325
Episode 32514th June 2024 • Money Talk With Tiff • Tiffany Grant
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In this enlightening episode of Money Talk With Tiff, Tiffany Grant sits down with Rod Griffin from Experian to discuss common misconceptions about credit scores and reports. Rod Griffin, who is the Director of Consumer Education and Advocacy at Experian, provides valuable insights into how credit works and shares tips for maintaining a healthy credit score.

About Our Guest

Rod Griffin is Senior Director of Consumer Education and Advocacy for Experian, where he manages the award-winning national consumer education and advocacy program in North America. With more than 25 years of experience in the credit reporting and information services industry, he is an expert on consumer issues, particularly credit reporting, credit scoring and identity theft. He frequently appears in national television, print, radio and online media and presents regularly at regional and national financial literacy events.

Connect with Rod

Twitter (X): @Rod_Griffin

Credit Chat on Twitter (X): https://twitter.com/hashtag/creditchat

Connect with Tiffany

Website: https://www.moneytalkwitht.com

Facebook: Money Talk With Tiff

Twitter: @moneytalkwitht

Instagram: @moneytalkwitht

LinkedIn: Tiffany Grant

YouTube: Money Talk With Tiff

Pinterest: @moneytalkwitht

TikTok: @moneytalkwitht

Timestamps

[00:00] Responsibly using credit for financial advantage.

[03:20] Credit is essential for financial opportunities and success.

[06:49] Credit score doesn't affect credit report.

[10:43] Credit bureau provides Fico scores to lenders.

[14:38] Understand credit score factors, pay on time.

[16:45] Dispute information, but it has risks.

Key Topics Covered

1. Introduction to Experian:

  • Rod explains that Experian is a global information services company known for being one of the big three credit bureaus in the U.S.
  • Highlights of Experian's diverse services, including credit reporting, fraud and identity theft prevention, automotive history, and healthcare financial services.

2. Common Credit Misconceptions:

  • Credit isn't bad; debt mismanagement is: Credit is a tool, and debt is the problem if not managed properly.
  • Credit report checks: Checking your credit report does not hurt your credit score.
  • Credit report vs. Credit score: The importance of understanding the difference between them.
  • Credit score variability: Reasons for having multiple credit scores due to different scoring models and lenders’ criteria.

3. Improving Your Credit Score:

  • First steps: Obtain your credit report and identify risk factors impacting your score.
  • Two key practices: Always pay your bills on time and keep your credit card balances low.
  • Detailed guidance on disputing inaccuracies on your credit report.

4. Disputing Credit Report Items:

  • Explanation of the legitimate process of disputing data inaccuracies.
  • Warning against dubious advice to dispute all items in hopes they will fall off your report.

5. Additional Resources and Tools:

  • Experian's free credit monitoring services.
  • Invitation to join the "Credit Chat" on X (formerly Twitter) for more discussions on credit and personal finance.

Resources Mentioned

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Copyright 2024 Tiffany Grant



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Transcripts

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You know what it is. That's right. It's time to talk money with your money

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nerd and financial coach. Now tighten those purse strings

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and open those ears. It's the money talk with Tiff

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podcast.

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Hey, everyone. I am so excited because I have a very special

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guest on the line today. I have Rod Griffin from Experian, and

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he's here to talk to us about credit misconceptions.

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So, hey, Rod, how are you today? I'm great. Good morning, and thanks for having

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me. Yes, thank you so much for taking time at us of your busy schedule

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to talk to our audience about this. So let's just hop right in. So, first

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and foremost, who is Experian? Just so we can lay the

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groundwork for people. Sure. Experian is

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an information services company, and

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we're best known as one of

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the big three credit bureaus in the United States. That's

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just actually one of our businesses. But we do lots of things

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around information. So, you know, just to

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kind of give you a sense, we're actually the world's largest information services

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company. We have operations in more than 30 countries.

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But your credit report never leaves the United States. So we

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operate essentially independently from nation to nation, and

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we have businesses around fraud and identity theft. We

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have an automotive history business. So if you want to learn

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about the used car you're about to buy, you can get an Experian auto check

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report and learn more about that. We have a business that

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helps healthcare providers with cash flow management and is working on tools

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to help people better manage their healthcare

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information and relationships with their

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doctors. So a wide range of

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different businesses. But for today, we're the

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credit bureau side of our company. Yeah, perfect. And I'm glad you

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went into all of that, because I had no idea.

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You know, everybody's so focused on credit, and that's what we know

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Experian as one of the big three. So with that, that being

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said, when it comes to credit, what are some

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misconceptions when it comes to credit scores, credit reports, things

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of that nature that you've seen in your work? Sure. How

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long do we have? Because we can go on a long time.

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So just sort of the kind of the. I

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guess I hit some of the top ones that always come to mind. The first

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is that credit is bad. You know,

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credit isn't bad. Credit's a financial tool. Debt is the financial

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problem. If you take on too much and you don't have to have

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debt to use credit. The example I often use

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is that if you have a credit card and you make all of your purchases

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each month, and then you pay the balance in full. And when you do, you

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get cash back on purchases or discounts on things you buy,

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or airline miles or whatever it might be. That gives

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you financial advantage. And you

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don't take on any debt, so you don't have to have debt. When you have

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credit, usually there's some debt associated, but at the same

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time, you also can use credit to help you improve your financial

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life and your overall lifestyle if you do it

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wisely. There are, for example, most of us can't buy

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a house using cash. So if you have credit established, you're using it

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well. It can help you achieve the goal of

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homeownership. Most of us can't buy a new car with cash, but we

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can work toward that. And good credit will help you

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save money by having lower interest rates, and better

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terms will help you access other kinds of

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financial services and resources. Having a

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credit history is one of the keys

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to gaining access to better financial

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opportunities. And that, I think, is another common

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misperception that, that a credit report is a

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barrier to financial

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opportunity when it really should be the opposite. If

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you're using your credit well and you understand how credit reporting and credit

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works, credit becomes a financial,

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very powerful financial tool to help you have other

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opportunities and is really key to opening the

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door to those other kinds of financial

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agreements. That's one of the things I want people to understand, is that we

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want you to have a strong credit history. We want to help

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connect you with business, with

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other financial services providers, with banks and so on,

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because that's going to empower you to be more successful and

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have a better, stronger life. And that's what we really want to

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have happen. Yeah, I was just going to say,

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that is so true. And that's something that I tell my audience all the time.

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For a long time, I was scared, terrified of credit.

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And it wasn't until I was in, like my early twenties or

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so where I finally broke down and got a credit card. But

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it was like the best thing that ever happened because, you know, I bought my

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house when I was 26, you know, buy cars, whatever it is,

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and I couldn't have done that had I not started paying attention to my

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credit and actually getting credit. So I'm glad that you mentioned that.

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Yeah, I mean, it's, it's a different way to think about it. Many times, you

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know, we think about credit being this thing that gets us into

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trouble, but it's like any, you know, I still, people it's like any tool. If

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you have a hammer and you hit the nail with it, it's great. If you

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hit your thumb, not so much. So it's how you use the tools that

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you have available. And if you use it well, it's going to

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give you much greater opportunity in, in the long term,

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you know, so a couple of other kinds of misperceptions. You know, people are afraid

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to get their credit report because they're afraid it will hurt their credit scores or

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hurt their ability to get credit. That's absolutely not true. You can get your

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credit report as often as you like, and you should know what's in it. You

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should get it. I always tell people a minimum of once a year, probably more

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often than that. You can subscribe to free monitoring services. Of course, experian

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has the monitoring service, as do others, and get your credit

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report and credit score once a month. Know exactly what's there, make

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sure you're not a victim of fraud or identity theft. And if you find

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evidence, it can help you recover and restore your

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credit history. So it's a very important tool to help protect

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you, and it, again, will help you build your credit scores. You'll know what's there.

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It doesn't affect credit scores. To get your own credit report, you can actually

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get your credit report 156 times a year for free

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through annualcreditreport.com dot. So, you know, it was the

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losses. You can get it once a year from each of the three bureaus. So

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you could get three. But the credit bureaus have now made permanent a

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policy that if you go to annualcreditreport.com, you can get your credit

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report from each of the three bureaus free once a week. So

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there's no reason not to check your credit report. You don't have to worry about

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it affecting credit scores or hurting your credit

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in any way. And I guess to touch on credit

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scores, there's a ton of misperceptions around credit

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scores. They start with, a

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credit score is not the same as your credit report. I often hear

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people connect the two as if they're the same or talk about them as if

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they're the same and they're not. A credit score

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is a tool that's used to analyze the information in your

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report. It's what lenders use to help them predict the likelihood you'll

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repay a loan as agreed, and it

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reflects the information in your report at a moment in time. The way I kind

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of describe it is if you think about you being in school and you do

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a paper that's like the credit report, the teacher

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is kind of like the lender, the banker. And the

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credit score is like the grade that the teacher gives. It reflects the

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information in that paper, and that's what a credit score does. And it

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will change as the information in your credit score or in your credit

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report, pardon me? Does. So I always tell people, don't focus so much

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on the number. Instead focus on what's in the credit report. That's going

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to help you improve the strength of that homework. Right.

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Or the test you've taken. That's going to help improve the credit history. If you

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take care of your credit history, the credit scores are going to take care of

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themselves. And I think one last thing I would touch on is

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people often ask me, why are there so many different credit scores?

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And you have three credit reports, one from Experian, one from

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Transunion, one from Equifax. There are lots and

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lots of different credit scores. And the reason is that

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there are different types of lenders, and there are different types of

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lending. So a credit union, for example, has a certain

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type of customer. They have certain characteristics, and so they have

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credit scores that reflect and help them predict the risk

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associated with their customers. If you are a national bank, your

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customers have different kinds of behaviors and different kinds

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of financial needs and accounts and those sorts of things. So they

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have scores that reflect their customer

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behaviors and help them predict risk for them. The same thing is true for

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credit cards or mortgage lenders. They're looking at different

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things, and then there are different types of lending. So if you're getting a credit

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card, they want to predict the likelihood that

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you'll pay your credit card bill on time. If you're buying a house,

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the mortgage company wants to predict the likelihood you'll pay your mortgage on time.

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If you're buying a car, they want to know your pay your car loan on

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time. They may not care so much about the other types of

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accounts you have. They do, of course, but it's,

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you know, they're looking at what kind of loan

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are you getting, because people will pay them differently. And the things

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that indicate risk from a credit report for each of those are different. And that's

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why there are different credit scores. They're just trying to predict different kinds of things

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for different kinds of consumers. So

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it's. So there's lots of scores. Three credit reports. Gotcha. Gotcha.

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So just to recap, all of the credit scores that a person

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could possibly have are originated from those three

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credit reports. Correct? Yes, in a way. So they're calculated

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using the information from the credit reports, but they can come

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into, they can be done in different ways or calculated

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by different, in different places. So if

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a lender comes to experian and, you know, you've applied for a

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loan, they can come to Experian, say, I want. I want Tiff's credit report,

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and then I want a FICO eight score applied. When you

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send it to me, Experian can provide that service. So we

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would, we get paid for compiling the credit report, and

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then FICO gets paid for their score, and we route

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the report through the score. And that score is Fico's score. It's not experience.

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We don't know as a credit bureau what that formula

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is. That's proprietary to Fico. And there are actually

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something in excess of 200 different scores we can do that

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for. So that's one way scores get calculated, and we send the

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report and the score together to the lender. And when the lender gets

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the report, they can say, well, I want to see this on my screen. I

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want the identifying information from the report, and then I want the scores, and

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then I want the rest of the report. And so it looks like the score

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is part of the report, when in fact, it's not. It's a separate

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process, two different things, but they're delivered together, if

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that makes sense. So that's one way scores happen.

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Another is that we send the report to the lender, and then the lender

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calculates their own scores. I mean, most of the large lenders have their own

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risk management divisions, is what they call them, and they have their own scoring

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systems, and they'll apply the scores then. So we wouldn't be

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involved. If you're buying a house, there are third party

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mortgage reporting companies, and you said they get the reports and they get other information

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from the application, and then they would calculate a score

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and send all of that to the mortgage company, so we

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wouldn't be involved in the scoring process. So scores can come from several different

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places. Very cool, very interesting. I never knew that.

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And, you know, when you think about, you know, the big credit

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bureaus and when you go to, like, a lender, for instance, and they're like, oh,

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we're gonna pull, you know, you never know what's going on in the back

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end, like, how everything is getting compiled for them. But

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I'm glad you brought that up, because that is something that I hear a lot

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of, you know, people might check, like their credit karma or

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credit sesame, whatever you know, those are, and they're like, oh, this is

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my credit score. And I'm like, you actually have hundreds of credit

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scores, but they're all real. And they're

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all valid. You know, I hear that, too. You know, what's a fake Oscar? What's

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an educational score? Well, they're real credit

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scores. You know, with some of the others, there's. Vantage score is a big player

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in the, in the credit marketplace. I just

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saw a statistic from them that their, their

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presence grew by more than 43% last

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year in the scoring world. And

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so they're becoming more

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prevalent in sort of the non lending areas where

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credit reports and scores are used. So things like getting a cell phone, for example,

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or utilities, those sorts of things. Insurance,

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potentially. You know, they're not your traditional

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lending kinds of circumstances, but they use credit reports because you're

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paying a bill that's very much like a loan. It's once a

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month you have a bill. It's the same amount you paid each month. So they're

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making a financial decision, and they will look at

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credit scores. So vantage score is a big player. Fico, of

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course, is the one people know about. And then there are other custom

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scores, and they each have more than one score.

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And again, for the reasons that I kind of touched on

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earlier. Yes, yes. Now, if someone's

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listening right now and they're like, all right, Rod, I hear you. I

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understand how all this works. My credit score is in the trash.

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What is the first thing you think people should do or

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work on when it comes to their credit score? Like, what has the biggest return

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on investment? Yeah. So the first step is get

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your credit report and a score and then a list

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of what we call the risk factors that go with that score. And when you

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get your score from Experian through our free monitoring service, for

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example, we give you a credit report. We give you the

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score, a FICO eight score, and a list

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of the things that are most affecting that score. And

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we call those risk factor statements. Those will tell you

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exactly what you need to work on in your credit report to make that

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score better. So that's where I would start. Get the

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information you need to empower yourself. Know what's affecting that

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score. Sometimes they sound kind of funny. People are like, this doesn't make

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any sense, but they are telling you exactly what's

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having the biggest impact. And you can look at your credit report

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and tie those back and know exactly what you need to work on over

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time to make them better. There are really

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only two things that you need to do every single time,

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every month to have good credit scores. And

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that is you have to pay your bills on time, every single time. If you

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miss a payment, it's going to wreck your credit scores. And then you have to

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keep your credit card balances as low as possible. So if you can pay

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your credit card balances in full each month, that's the best thing to do.

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And if you're doing those two things, your scores are going to be fine, because

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all of the other stuff that goes into scores follow those.

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So you know, you'll build a length of credit history. You'll have

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a mix of credit over time. You won't have lots

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of new inquiries or new changes

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in your credit history. So if you're paying your bills on time and keeping your

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balances low, that's gonna help you have the best credit

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scores. And that's often easier said than

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done, but that's what you have to

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do. Gotcha. Gotcha. And I wanna hit on one thing that I hear a

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lot of, and this is very much so in

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the social media streets, but just dispute everything you can just

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dispute, and then it'll just fall off. So if you can

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just hit on. That for a minute, well, you can dispute

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everything. It probably won't just fall off.

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So if you find something in your credit report that

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you believe is not accurate, you absolutely

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should dispute it. And that's what that process is for.

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With Experian, we try to make it as easy as possible. You can go to

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Experian.com dispute. If you don't have a current

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copy of your credit report, we'll give you a free one right there on the

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spot. And beside each entry, there's a button, and

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you can say, I need to dispute it, click the button, and then follow the

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instructions and submit the dispute. There's no cost to

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do that, and it doesn't affect lending decisions in

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any way. And you absolutely should dispute the

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information, the scheme,

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in what I think of as sort of the illegitimate

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credit repair kinds of schemes that they have that they'll tell

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you to dispute something over and over and over again, and

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eventually it will come off the report. Well, what they're really trying to do

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is take advantage of what they'll tell you is a loophole in the law.

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So a lender, if you dispute something, has to respond to the

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credit bureau within 30 days. And if they don't,

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we'll remove that account from the credit report. But what

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the credit repair companies don't tell you, and you know, they don't tell you on

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social media is that if a lender misses that

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dispute, they can tell us to return the

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information to the credit report, and

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then we just have to send you a letter saying it's come back. And

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that was a change in the law in the

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early two thousands because credit repair

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was trying to falsely manipulate the

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information by submitting literally hundreds of disputes on an

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account, hoping that that would happen. And

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Congress even saw that. There needs to be a mechanism to put

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it back when it's accurate, but it's just a

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scheme that was being manipulated in the law to get it taken

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off. So that's where that generally comes from. Gotcha. Gotcha.

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So really what's happening is they're disputing

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it and then waiting for the other

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party to respond. If they don't respond, it falls off.

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But it always has a chance to come back if it's an actual legitimate

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thing that should be on your credit, right? Yes. And

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the source of the information, usually lender will tell us,

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you'll send a notice saying this account information should be

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restored to the credit file and in response

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to the dispute, and then we will send you a

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notice that it has been returned. So that's how that

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would work. Gotcha. Gotcha. So everybody listening, be careful.

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If it's actually legitimate, it may turn right back around and come back on

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your credit report. So thank you so much, Rod, for joining me on the

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podcast today. This was very insightful. I've learned a few things

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just from our conversation. So if people were interested in finding out

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more about Experian or you, where could they find you? Sure, they can

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go to experian.com, of course. And we have something called ask Experian

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that answers questions and provides lots and lots of information.

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You can search for any, just about any topic. Great place to

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start. You can join us on credit chat every Wednesday

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00 Central, 03:00 Eastern. You can learn more about it

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at ex PN credit chat. We have

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wonderful conversations about personal finance topics,

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credit and other things. So, you know, you join us there, and we're happy

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to be thrilled to have you with us and sharing your knowledge and experience

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and others as well. And I'm

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on Twitter odd Griffin and

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out there and about just about everywhere else. So, you

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know, join us and be part of the conversation. I think that's the most

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important thing you can do. Yeah. Thank you so much. I will make sure I

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have all of those links in the show notes and just a quick note about

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the credit chats. I'm actually a guest occasionally and it

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is very fun, very good information. It's usually a panel of

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a few of us talking about a certain topic for that week

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and I love the conversations. Highly recommend if you're over

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on X, formally known as Twitter, definitely check those out.

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And one more thing I wanted to mention about Experian and also the

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other credit bureaus are credit freezes. That's something that

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I also do as well. So check out the Experian website

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and just mosey around. It seems like I need to do a little moseying

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myself. Thank you, Rod and I hope you have a wonderful rest of your

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day. Thank you. You too. Take care. Thank you.

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Bye. Thank you for listening, joining and

:

being a part of the Money Talk with TIFF podcast this week. You can check

:

Tiff out every Thursday for a new Money Talk podcast, but if you

:

just can't wait until next week, you can listen to previous podcast

:

episodes@moneytalkwitht.com or

:

follow TIFF on all social media platforms. Forms at money talk

:

with t until next time, spend wise by

:

spending less than you make a word to the money wise is always

:

sufficient.

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