Shownotes
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
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LinkedIn: Tiffany Grant
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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
This podcast uses the following third-party services for analysis:
Chartable - https://chartable.com/privacy
Transcripts
You know what it is. That's right. It's time to talk money with your money
Speaker:nerd and financial coach. Now tighten those purse strings
Speaker:and open those ears. It's the money talk with Tiff
Speaker:podcast.
Speaker:Hey, everyone. I am so excited because I have a very special
Speaker:guest on the line today. I have Rod Griffin from Experian, and
Speaker:he's here to talk to us about credit misconceptions.
Speaker:So, hey, Rod, how are you today? I'm great. Good morning, and thanks for having
Speaker:me. Yes, thank you so much for taking time at us of your busy schedule
Speaker:to talk to our audience about this. So let's just hop right in. So, first
Speaker:and foremost, who is Experian? Just so we can lay the
Speaker:groundwork for people. Sure. Experian is
Speaker:an information services company, and
Speaker:we're best known as one of
Speaker:the big three credit bureaus in the United States. That's
Speaker:just actually one of our businesses. But we do lots of things
Speaker:around information. So, you know, just to
Speaker:kind of give you a sense, we're actually the world's largest information services
Speaker:company. We have operations in more than 30 countries.
Speaker:But your credit report never leaves the United States. So we
Speaker:operate essentially independently from nation to nation, and
Speaker:we have businesses around fraud and identity theft. We
Speaker:have an automotive history business. So if you want to learn
Speaker:about the used car you're about to buy, you can get an Experian auto check
Speaker:report and learn more about that. We have a business that
Speaker:helps healthcare providers with cash flow management and is working on tools
Speaker:to help people better manage their healthcare
Speaker:information and relationships with their
Speaker:doctors. So a wide range of
Speaker:different businesses. But for today, we're the
Speaker:credit bureau side of our company. Yeah, perfect. And I'm glad you
Speaker:went into all of that, because I had no idea.
Speaker:You know, everybody's so focused on credit, and that's what we know
Speaker:Experian as one of the big three. So with that, that being
Speaker:said, when it comes to credit, what are some
Speaker:misconceptions when it comes to credit scores, credit reports, things
Speaker:of that nature that you've seen in your work? Sure. How
Speaker:long do we have? Because we can go on a long time.
Speaker:So just sort of the kind of the. I
Speaker:guess I hit some of the top ones that always come to mind. The first
Speaker:is that credit is bad. You know,
Speaker:credit isn't bad. Credit's a financial tool. Debt is the financial
Speaker:problem. If you take on too much and you don't have to have
Speaker:debt to use credit. The example I often use
Speaker:is that if you have a credit card and you make all of your purchases
Speaker:each month, and then you pay the balance in full. And when you do, you
Speaker:get cash back on purchases or discounts on things you buy,
Speaker:or airline miles or whatever it might be. That gives
Speaker:you financial advantage. And you
Speaker:don't take on any debt, so you don't have to have debt. When you have
Speaker:credit, usually there's some debt associated, but at the same
Speaker:time, you also can use credit to help you improve your financial
Speaker:life and your overall lifestyle if you do it
Speaker:wisely. There are, for example, most of us can't buy
Speaker:a house using cash. So if you have credit established, you're using it
Speaker:well. It can help you achieve the goal of
Speaker:homeownership. Most of us can't buy a new car with cash, but we
Speaker:can work toward that. And good credit will help you
Speaker:save money by having lower interest rates, and better
Speaker:terms will help you access other kinds of
Speaker:financial services and resources. Having a
Speaker:credit history is one of the keys
Speaker:to gaining access to better financial
Speaker:opportunities. And that, I think, is another common
Speaker:misperception that, that a credit report is a
Speaker:barrier to financial
Speaker:opportunity when it really should be the opposite. If
Speaker:you're using your credit well and you understand how credit reporting and credit
Speaker:works, credit becomes a financial,
Speaker:very powerful financial tool to help you have other
Speaker:opportunities and is really key to opening the
Speaker:door to those other kinds of financial
Speaker:agreements. That's one of the things I want people to understand, is that we
Speaker:want you to have a strong credit history. We want to help
Speaker:connect you with business, with
Speaker:other financial services providers, with banks and so on,
Speaker:because that's going to empower you to be more successful and
Speaker:have a better, stronger life. And that's what we really want to
Speaker:have happen. Yeah, I was just going to say,
Speaker:that is so true. And that's something that I tell my audience all the time.
Speaker:For a long time, I was scared, terrified of credit.
Speaker:And it wasn't until I was in, like my early twenties or
Speaker:so where I finally broke down and got a credit card. But
Speaker:it was like the best thing that ever happened because, you know, I bought my
Speaker:house when I was 26, you know, buy cars, whatever it is,
Speaker:and I couldn't have done that had I not started paying attention to my
Speaker:credit and actually getting credit. So I'm glad that you mentioned that.
Speaker:Yeah, I mean, it's, it's a different way to think about it. Many times, you
Speaker:know, we think about credit being this thing that gets us into
Speaker:trouble, but it's like any, you know, I still, people it's like any tool. If
Speaker:you have a hammer and you hit the nail with it, it's great. If you
Speaker:hit your thumb, not so much. So it's how you use the tools that
Speaker:you have available. And if you use it well, it's going to
Speaker:give you much greater opportunity in, in the long term,
Speaker:you know, so a couple of other kinds of misperceptions. You know, people are afraid
Speaker:to get their credit report because they're afraid it will hurt their credit scores or
Speaker:hurt their ability to get credit. That's absolutely not true. You can get your
Speaker:credit report as often as you like, and you should know what's in it. You
Speaker:should get it. I always tell people a minimum of once a year, probably more
Speaker:often than that. You can subscribe to free monitoring services. Of course, experian
Speaker:has the monitoring service, as do others, and get your credit
Speaker:report and credit score once a month. Know exactly what's there, make
Speaker:sure you're not a victim of fraud or identity theft. And if you find
Speaker:evidence, it can help you recover and restore your
Speaker:credit history. So it's a very important tool to help protect
Speaker:you, and it, again, will help you build your credit scores. You'll know what's there.
Speaker:It doesn't affect credit scores. To get your own credit report, you can actually
Speaker:get your credit report 156 times a year for free
Speaker:through annualcreditreport.com dot. So, you know, it was the
Speaker:losses. You can get it once a year from each of the three bureaus. So
Speaker:you could get three. But the credit bureaus have now made permanent a
Speaker:policy that if you go to annualcreditreport.com, you can get your credit
Speaker:report from each of the three bureaus free once a week. So
Speaker:there's no reason not to check your credit report. You don't have to worry about
Speaker:it affecting credit scores or hurting your credit
Speaker:in any way. And I guess to touch on credit
Speaker:scores, there's a ton of misperceptions around credit
Speaker:scores. They start with, a
Speaker:credit score is not the same as your credit report. I often hear
Speaker:people connect the two as if they're the same or talk about them as if
Speaker:they're the same and they're not. A credit score
Speaker:is a tool that's used to analyze the information in your
Speaker:report. It's what lenders use to help them predict the likelihood you'll
Speaker:repay a loan as agreed, and it
Speaker:reflects the information in your report at a moment in time. The way I kind
Speaker:of describe it is if you think about you being in school and you do
Speaker:a paper that's like the credit report, the teacher
Speaker:is kind of like the lender, the banker. And the
Speaker:credit score is like the grade that the teacher gives. It reflects the
Speaker:information in that paper, and that's what a credit score does. And it
Speaker:will change as the information in your credit score or in your credit
Speaker:report, pardon me? Does. So I always tell people, don't focus so much
Speaker:on the number. Instead focus on what's in the credit report. That's going
Speaker:to help you improve the strength of that homework. Right.
Speaker:Or the test you've taken. That's going to help improve the credit history. If you
Speaker:take care of your credit history, the credit scores are going to take care of
Speaker:themselves. And I think one last thing I would touch on is
Speaker:people often ask me, why are there so many different credit scores?
Speaker:And you have three credit reports, one from Experian, one from
Speaker:Transunion, one from Equifax. There are lots and
Speaker:lots of different credit scores. And the reason is that
Speaker:there are different types of lenders, and there are different types of
Speaker:lending. So a credit union, for example, has a certain
Speaker:type of customer. They have certain characteristics, and so they have
Speaker:credit scores that reflect and help them predict the risk
Speaker:associated with their customers. If you are a national bank, your
Speaker:customers have different kinds of behaviors and different kinds
Speaker:of financial needs and accounts and those sorts of things. So they
Speaker:have scores that reflect their customer
Speaker:behaviors and help them predict risk for them. The same thing is true for
Speaker:credit cards or mortgage lenders. They're looking at different
Speaker:things, and then there are different types of lending. So if you're getting a credit
Speaker:card, they want to predict the likelihood that
Speaker:you'll pay your credit card bill on time. If you're buying a house,
Speaker:the mortgage company wants to predict the likelihood you'll pay your mortgage on time.
Speaker:If you're buying a car, they want to know your pay your car loan on
Speaker:time. They may not care so much about the other types of
Speaker:accounts you have. They do, of course, but it's,
Speaker:you know, they're looking at what kind of loan
Speaker:are you getting, because people will pay them differently. And the things
Speaker:that indicate risk from a credit report for each of those are different. And that's
Speaker:why there are different credit scores. They're just trying to predict different kinds of things
Speaker:for different kinds of consumers. So
Speaker:it's. So there's lots of scores. Three credit reports. Gotcha. Gotcha.
Speaker:So just to recap, all of the credit scores that a person
Speaker:could possibly have are originated from those three
Speaker:credit reports. Correct? Yes, in a way. So they're calculated
Speaker:using the information from the credit reports, but they can come
Speaker:into, they can be done in different ways or calculated
Speaker:by different, in different places. So if
Speaker:a lender comes to experian and, you know, you've applied for a
Speaker:loan, they can come to Experian, say, I want. I want Tiff's credit report,
Speaker:and then I want a FICO eight score applied. When you
Speaker:send it to me, Experian can provide that service. So we
Speaker:would, we get paid for compiling the credit report, and
Speaker:then FICO gets paid for their score, and we route
Speaker:the report through the score. And that score is Fico's score. It's not experience.
Speaker:We don't know as a credit bureau what that formula
Speaker:is. That's proprietary to Fico. And there are actually
Speaker:something in excess of 200 different scores we can do that
Speaker:for. So that's one way scores get calculated, and we send the
Speaker:report and the score together to the lender. And when the lender gets
Speaker:the report, they can say, well, I want to see this on my screen. I
Speaker:want the identifying information from the report, and then I want the scores, and
Speaker:then I want the rest of the report. And so it looks like the score
Speaker:is part of the report, when in fact, it's not. It's a separate
Speaker:process, two different things, but they're delivered together, if
Speaker:that makes sense. So that's one way scores happen.
Speaker:Another is that we send the report to the lender, and then the lender
Speaker:calculates their own scores. I mean, most of the large lenders have their own
Speaker:risk management divisions, is what they call them, and they have their own scoring
Speaker:systems, and they'll apply the scores then. So we wouldn't be
Speaker:involved. If you're buying a house, there are third party
Speaker:mortgage reporting companies, and you said they get the reports and they get other information
Speaker:from the application, and then they would calculate a score
Speaker:and send all of that to the mortgage company, so we
Speaker:wouldn't be involved in the scoring process. So scores can come from several different
Speaker:places. Very cool, very interesting. I never knew that.
Speaker:And, you know, when you think about, you know, the big credit
Speaker:bureaus and when you go to, like, a lender, for instance, and they're like, oh,
Speaker:we're gonna pull, you know, you never know what's going on in the back
Speaker:end, like, how everything is getting compiled for them. But
Speaker:I'm glad you brought that up, because that is something that I hear a lot
Speaker:of, you know, people might check, like their credit karma or
Speaker:credit sesame, whatever you know, those are, and they're like, oh, this is
Speaker:my credit score. And I'm like, you actually have hundreds of credit
Speaker:scores, but they're all real. And they're
Speaker:all valid. You know, I hear that, too. You know, what's a fake Oscar? What's
Speaker:an educational score? Well, they're real credit
Speaker:scores. You know, with some of the others, there's. Vantage score is a big player
Speaker:in the, in the credit marketplace. I just
Speaker:saw a statistic from them that their, their
Speaker:presence grew by more than 43% last
Speaker:year in the scoring world. And
Speaker:so they're becoming more
Speaker:prevalent in sort of the non lending areas where
Speaker:credit reports and scores are used. So things like getting a cell phone, for example,
Speaker:or utilities, those sorts of things. Insurance,
Speaker:potentially. You know, they're not your traditional
Speaker:lending kinds of circumstances, but they use credit reports because you're
Speaker:paying a bill that's very much like a loan. It's once a
Speaker:month you have a bill. It's the same amount you paid each month. So they're
Speaker:making a financial decision, and they will look at
Speaker:credit scores. So vantage score is a big player. Fico, of
Speaker:course, is the one people know about. And then there are other custom
Speaker:scores, and they each have more than one score.
Speaker:And again, for the reasons that I kind of touched on
Speaker:earlier. Yes, yes. Now, if someone's
Speaker:listening right now and they're like, all right, Rod, I hear you. I
Speaker:understand how all this works. My credit score is in the trash.
Speaker:What is the first thing you think people should do or
Speaker:work on when it comes to their credit score? Like, what has the biggest return
Speaker:on investment? Yeah. So the first step is get
Speaker:your credit report and a score and then a list
Speaker:of what we call the risk factors that go with that score. And when you
Speaker:get your score from Experian through our free monitoring service, for
Speaker:example, we give you a credit report. We give you the
Speaker:score, a FICO eight score, and a list
Speaker:of the things that are most affecting that score. And
Speaker:we call those risk factor statements. Those will tell you
Speaker:exactly what you need to work on in your credit report to make that
Speaker:score better. So that's where I would start. Get the
Speaker:information you need to empower yourself. Know what's affecting that
Speaker:score. Sometimes they sound kind of funny. People are like, this doesn't make
Speaker:any sense, but they are telling you exactly what's
Speaker:having the biggest impact. And you can look at your credit report
Speaker:and tie those back and know exactly what you need to work on over
Speaker:time to make them better. There are really
Speaker:only two things that you need to do every single time,
Speaker:every month to have good credit scores. And
Speaker:that is you have to pay your bills on time, every single time. If you
Speaker:miss a payment, it's going to wreck your credit scores. And then you have to
Speaker:keep your credit card balances as low as possible. So if you can pay
Speaker:your credit card balances in full each month, that's the best thing to do.
Speaker:And if you're doing those two things, your scores are going to be fine, because
Speaker:all of the other stuff that goes into scores follow those.
Speaker:So you know, you'll build a length of credit history. You'll have
Speaker:a mix of credit over time. You won't have lots
Speaker:of new inquiries or new changes
Speaker:in your credit history. So if you're paying your bills on time and keeping your
Speaker:balances low, that's gonna help you have the best credit
Speaker:scores. And that's often easier said than
Speaker:done, but that's what you have to
Speaker:do. Gotcha. Gotcha. And I wanna hit on one thing that I hear a
Speaker:lot of, and this is very much so in
Speaker:the social media streets, but just dispute everything you can just
Speaker:dispute, and then it'll just fall off. So if you can
Speaker:just hit on. That for a minute, well, you can dispute
Speaker:everything. It probably won't just fall off.
Speaker:So if you find something in your credit report that
Speaker:you believe is not accurate, you absolutely
Speaker:should dispute it. And that's what that process is for.
Speaker:With Experian, we try to make it as easy as possible. You can go to
Speaker:Experian.com dispute. If you don't have a current
Speaker:copy of your credit report, we'll give you a free one right there on the
Speaker:spot. And beside each entry, there's a button, and
Speaker:you can say, I need to dispute it, click the button, and then follow the
Speaker:instructions and submit the dispute. There's no cost to
Speaker:do that, and it doesn't affect lending decisions in
Speaker:any way. And you absolutely should dispute the
Speaker:information, the scheme,
Speaker:in what I think of as sort of the illegitimate
Speaker:credit repair kinds of schemes that they have that they'll tell
Speaker:you to dispute something over and over and over again, and
Speaker:eventually it will come off the report. Well, what they're really trying to do
Speaker:is take advantage of what they'll tell you is a loophole in the law.
Speaker:So a lender, if you dispute something, has to respond to the
Speaker:credit bureau within 30 days. And if they don't,
Speaker:we'll remove that account from the credit report. But what
Speaker:the credit repair companies don't tell you, and you know, they don't tell you on
Speaker:social media is that if a lender misses that
Speaker:dispute, they can tell us to return the
Speaker:information to the credit report, and
Speaker:then we just have to send you a letter saying it's come back. And
Speaker:that was a change in the law in the
Speaker:early two thousands because credit repair
Speaker:was trying to falsely manipulate the
Speaker:information by submitting literally hundreds of disputes on an
Speaker:account, hoping that that would happen. And
Speaker:Congress even saw that. There needs to be a mechanism to put
Speaker:it back when it's accurate, but it's just a
Speaker:scheme that was being manipulated in the law to get it taken
Speaker:off. So that's where that generally comes from. Gotcha. Gotcha.
Speaker:So really what's happening is they're disputing
Speaker:it and then waiting for the other
Speaker:party to respond. If they don't respond, it falls off.
Speaker:But it always has a chance to come back if it's an actual legitimate
Speaker:thing that should be on your credit, right? Yes. And
Speaker:the source of the information, usually lender will tell us,
Speaker:you'll send a notice saying this account information should be
Speaker:restored to the credit file and in response
Speaker:to the dispute, and then we will send you a
Speaker:notice that it has been returned. So that's how that
Speaker:would work. Gotcha. Gotcha. So everybody listening, be careful.
Speaker:If it's actually legitimate, it may turn right back around and come back on
Speaker:your credit report. So thank you so much, Rod, for joining me on the
Speaker:podcast today. This was very insightful. I've learned a few things
Speaker:just from our conversation. So if people were interested in finding out
Speaker:more about Experian or you, where could they find you? Sure, they can
Speaker:go to experian.com, of course. And we have something called ask Experian
Speaker:that answers questions and provides lots and lots of information.
Speaker:You can search for any, just about any topic. Great place to
Speaker: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.
