As a kid, did you ever play a game with a group of other kids and then like magic, all of the rules flipped right in the middle of the game?
People just want to get in the game and start playing. They fall short of understanding what they're getting involved with. That could be a costly game to play, I know, because it personally cost me $2,000,000…once in the 80’s and once again in the 90’s.
I have bounced back from that experience 10 times and am far stronger and smarter because of it.
As an Investor, homeowner, first time investor or company owner, how can we win and get the highest level of return possible? After helping close more than 7000 unique credit and real estate transactions, there are simple secrets and in this series.
For a moment, try on your creditor's glasses:
You'll find that banks are designed to say NO.
Bankers will never be entrepreneurs and because of that their behavior is quite different than ours,, haven’t you noticed?
Their personal interest is self-preservation and job security. They will happily throw you under the bus to make them look good, by turning you down.
I have a client right now and Newport Beach, California, with $45,000,000 cash liquid in Wells Fargo bank and can't qualify for a $200 secured card with capital one because a series of incorrectly reported mortgage issues (that I will get deleted). You must therefore make sure that every single one of their "boxes” is checked in order for you to be considered worthy of obtaining financing from them.
What a bunch of crap!
I know the rules are “he whose got the gold makes the rules”. What if you could turn the tables on these guys once and for all? Remove one key tool that they have to judge you…your credit scores to save tens or hundreds of thousands of dollars in bank interest.
Perhaps now you can begin to see why I have been focused on credit scoring…to beat the banks at their own game, so we can borrow at the lowest possible rates and terms available!
Just so we're clear, I recommend that you DON'T manage your own credit issues unless you're highly effective and understand the rules of the game! Creditors have their own rules. If you don't know their rules you will be at a disadvantage…just like you were as a kid playing a game on the field, then along comes another kid and changes the rules.
To banks or investor group, credibility, is first and foremost. Having a clear, concise message about what you're looking to accomplish will help you achieve that goal. When they run a report on you, you need to know what on it before they do.
To understand how these behemoth credit agencies came to life, I'll share background on them.
The credit bureaus themselves have interesting histories. Equifax, originally called Retail Credit Company, was founded in 1899 in Atlanta by brothers Cator and Guy Woolford. The Woolfords would keep a list of creditworthy customers and compile their findings, which they would then sell. In many communities, representatives of the “Welcome Wagon” would take note of a person’s home, furnishings and character, among other factors. They would then report that information back to Equifax.
Experian is the newest credit bureau, buying out the famous TRW Information Services, which was the largest credit bureau at the time. In the 1970s and 1980s, one would say, “Let me pull their TRW.” TRW itself was part of a defense conglomerate.
TransUnion began as a railroad car leasing company in 1869. It acquired a credit bureau in Chicago in 1969. Back then, without computers, data was stored on index cards. The credit bureau that TransUnion purchased had stuffed more than 3.6 million such cards into more than 400 filing cabinets.
Transunion has deep data on more than 600,000,000 people. So it's easy to see the business that they are in. Selling information.
Each creditors has an agreement with one, two or more of the credit bureaus to provide “timely and accurate” payment reporting history to help assist other creditors in determining if that individuals credit scores and character are worthy of providing financing.
Keep in mind, the credit score model does one main thing… Determines the probability of bankruptcy.
Would you want to finance someone knowing that they could lose it all?
In this weekly series, I will share what you can do to increase your credit scores 20, 50, 100 points or more by following simple steps that will absolutely put more money in your pocket each and every month!
Corey
