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

• Experian Official Website
• Experian Dispute Process
• AnnualCreditReport.com
• A Comprehensive Guide to Credit for Millennials and Gen Z
• Transform Your Credit Score With These Easy Steps | Ep. 254

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Copyright 2024 Tiffany Grant

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

nerd and financial coach. Now tighten those purse strings

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

podcast.

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

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

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

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

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

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

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

groundwork for people. Sure. Experian is

an information services company, and

we're best known as one of

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

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

around information. So, you know, just to

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

company. We have operations in more than 30 countries.

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

operate essentially independently from nation to nation, and

we have businesses around fraud and identity theft. We

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

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

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

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

to help people better manage their healthcare

information and relationships with their

doctors. So a wide range of

different businesses. But for today, we're the

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

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

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

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

said, when it comes to credit, what are some

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

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

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

So just sort of the kind of the. I

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

is that credit is bad. You know,

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

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

debt to use credit. The example I often use

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

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

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

or airline miles or whatever it might be. That gives

you financial advantage. And you

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

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

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

life and your overall lifestyle if you do it

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

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

well. It can help you achieve the goal of

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

can work toward that. And good credit will help you

save money by having lower interest rates, and better

terms will help you access other kinds of

financial services and resources. Having a

credit history is one of the keys

to gaining access to better financial

opportunities. And that, I think, is another common

misperception that, that a credit report is a

barrier to financial

opportunity when it really should be the opposite. If

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

works, credit becomes a financial,

very powerful financial tool to help you have other

opportunities and is really key to opening the

door to those other kinds of financial

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

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

connect you with business, with

other financial services providers, with banks and so on,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

evidence, it can help you recover and restore your

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

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

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

get your credit report 156 times a year for free

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

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

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

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

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

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

it affecting credit scores or hurting your credit

in any way. And I guess to touch on credit

scores, there's a ton of misperceptions around credit

scores. They start with, a

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

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

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

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

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

repay a loan as agreed, and it

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Transunion, one from Equifax. There are lots and

lots of different credit scores. And the reason is that

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

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

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

credit scores that reflect and help them predict the risk

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

customers have different kinds of behaviors and different kinds

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

have scores that reflect their customer

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

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

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

card, they want to predict the likelihood that

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

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

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

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

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

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

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

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

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

for different kinds of consumers. So

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

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

could possibly have are originated from those three

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

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

into, they can be done in different ways or calculated

by different, in different places. So if

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

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

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

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

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

then FICO gets paid for their score, and we route

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

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

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

something in excess of 200 different scores we can do that

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

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

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

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

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

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

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

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

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

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

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

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

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

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

from the application, and then they would calculate a score

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

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

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

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

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

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

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

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

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

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

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

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

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

an educational score? Well, they're real credit

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

in the, in the credit marketplace. I just

saw a statistic from them that their, their

presence grew by more than 43% last

year in the scoring world. And

so they're becoming more

prevalent in sort of the non lending areas where

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

or utilities, those sorts of things. Insurance,

potentially. You know, they're not your traditional

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

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

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

making a financial decision, and they will look at

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

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

scores, and they each have more than one score.

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

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

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

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

What is the first thing you think people should do or

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

on investment? Yeah. So the first step is get

your credit report and a score and then a list

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

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

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

score, a FICO eight score, and a list

of the things that are most affecting that score. And

we call those risk factor statements. Those will tell you

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

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

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

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

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

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

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

time to make them better. There are really

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

every month to have good credit scores. And

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

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

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

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

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

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

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

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

of new inquiries or new changes

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

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

scores. And that's often easier said than

done, but that's what you have to

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

lot of, and this is very much so in

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

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

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

everything. It probably won't just fall off.

So if you find something in your credit report that

you believe is not accurate, you absolutely

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

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

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

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

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

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

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

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

any way. And you absolutely should dispute the

information, the scheme,

in what I think of as sort of the illegitimate

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

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

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

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

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

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

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

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

social media is that if a lender misses that

dispute, they can tell us to return the

information to the credit report, and

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

that was a change in the law in the

early two thousands because credit repair

was trying to falsely manipulate the

information by submitting literally hundreds of disputes on an

account, hoping that that would happen. And

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

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

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

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

So really what's happening is they're disputing

it and then waiting for the other

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

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

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

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

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

restored to the credit file and in response

to the dispute, and then we will send you a

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

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

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

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

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

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

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

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

that answers questions and provides lots and lots of information.

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

start. You can join us on credit chat every Wednesday

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

at ex PN credit chat. We have

wonderful conversations about personal finance topics,

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

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

and others as well. And I'm

on Twitter odd Griffin and

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.