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Behind us now argue a poor risk for lenders well if you are one of the more than seventeen million people in this country despite the sport is below 650.
That the answer would undoubtedly be yes but does that mean you're stuck forever with the poor credit label.
My next guest says no although the road to recovery can be a little painful John Alzheimer is the president of consumer education at credit dot com this is staggering number John.
These new fight -- scores show that 25%.
Nearly 43 million people have a pretty weak -- score below 600 wasn't.
-- even in the -- when they were giving out money to anybody for any reason that's quite scary -- us.
The distribution now below 650 which is 35% -- 79.
That is the most meaningful shift in -- -- distributions -- below -- Since the -- has been around and it's been around for two decades what do you need to buy a house or get a car loan.
While that's and that's true intelligence when your previous segments talked about how do you sell a car to someone who's a sub prime bar when it's actually easier than you think -- -- happen in future equity into the property.
What the asset and if they default it is to repossess that sell for the full one amount and your anger out of -- certainly lenders don't wanna do that.
That that's what that actually what it's gonna take some -- borrowers are really aware of the revenue in some wonderful not gonna forget about -- -- it won't -- -- weren't in my twenty years of credit histories.
Consumers and lenders have very very short memories so and -- will again be a time where people who have these low score 606 that he will be -- tomorrow okay now let's get to.
Changing the credit score improving in some way shape or form if you're below sixtieth seat right do you -- if not -- easy as it used to be and here's why.
People who have scores and the -- below 600 and below 6650.
Ranges they're not down there because they have a little bit of credit card debt.
They're down there because they haven't defaulted credit card debt foreclosures bankruptcies -- collections that late payments.
These things persist on a credit report for seven to ten years so we can have this conversation again in two and 3.5 years and people are still going to be down their -- It's not a permanent penalty if you -- draw -- line in the sand and say absolutely not I'm not gonna do the things that got -- here.
Then within 36 -- forty months you will be surprised how good your school can become simply by existing I am hearing.
That it is near impossible to get a prefer credit card these days is that true it is true for many consumers it's not true for consumers who have good credit I think -- -- -- for people of good credit they're not being given yet another account right well it.
I I opened seven cars last year and I did it not to have I did it to prove all these people know how did you do it teach us.
It's simple you have to have good could have to do is there're these credit cards if you do not have good credit.
And another important thing that people forget about it's not just about risk management it's about.
So someone who's got very very good credit.
-- -- -- a great credit risk but it's not gonna generate any revenue -- banks want revenue they just want people sitting there on their books let's go to your list of tips and we've got some that we can put on the screen wouldn't begin with here be realistic about purchases an application absolutely lucky if you're -- 600 you have to be very honest with yourself.
Is now the right time to apply for a car loan and -- 19% that's -- punishing way.
To buy -- -- -- -- it it may be time to stick with the -- for a few hours and you can drag yourself out of this position.
And actually that -- aren't much better and much more reasonable interest rate and therefore don't miss payments people old yet that's exactly what you again you're not -- 600 because and a couple of inquiries are you open a new tactic has got that stuff on your credit report -- you gotta stop the flow of bad information that's simple.
And am -- going to be panelists I remember I got in trouble when and here's here's another one stay away from pawnshops -- -- payday lenders sort of that they under.
Underbelly -- are very happy about that well they're universe of potential customers has now grown.
But I I heard in the past and I was told -- your credit score has a little check -- because.
You actually canceled the credit card I wasn't using yet I canceled that and and I got in trouble for that -- we all look the.
The world of credit scoring is not without humor.
Right and these are analytical tools not common -- tools including credit cards on May sound good -- actually can take away what's called open tomorrow the available credit.
Which is actually good -- so let's cut it up and throw -- -- but don't cancel shredded.
Get credit freeze that but leave an opening five job that he -- so that's great tips from -- alzheimer's.
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