Okay UI here’s the deal…  We often on this blog talk about the problems in the Black community but do not offer many solutions. We preach daily on what we are doing wrong, praise the few things we are doing right, but never address what we can do to fix those wrongs. Today I want to give you a solution to one of the most difficult subjects that plague many Blacks in America… Credit. Face it, like death and taxes, credit is one of these things that we will be faced with living on planet earth. It deems us worthy of homeownership, car ownership, and many services that are provided to us as human beings. Credit is also part of the legacy that we leave our children once we leave this plane. Our past debts can haunt our kids from beyond the grave, so it is important to have good credit history and high credit scores. The issue that seems to be problem in our community is a lack of education about credit, a lack of the importance of credit when it comes to being impoverished, and a sense of hopelessness when dealing with credit issues. Personally I have a credit score of about 790 because I knew how to get it. I was once like a lot of you. At one point after Identity theft, bad decisions, and simply letting my financial security go had a score of only 380! That means that I was considered the scum of the earth… At least on paper. How did I get to where I am today? Keep reading and I will tell you.

To know what you are faced with in the credit world you have to know what credit is. It is the promise that you and your word are equal to the amount of money represented at that time. Knowing that you have to now imagine that you are not you at this point nothing but a dollar amount that you must live up to. This means that every purchase you make and every dollar you spend is now accounted for by the people who said that you and your word is worth the dollar amount. It’s crazy to think you are just a number… But honestly get over it. Some things are the way they are, and until you have the billions/trillions of dollars to fix it this is your reality. So now that we have come to terms with our position in all of this, you next have to figure out how to satisfy the belief. You don’t exactly have to live up to the dollar amount in full, but you have to make them keep believing that you are, by paying your bills on time. You also have to allow them to believe in you b showing them that others believe in you as well. This happens by opening up other accounts, cars, furniture, and basic consumption where you need to make payments on a given thing. If so many people are willing to trust you with their money and merchandise then your approval rating among them (credit score) goes up. These are the basic principles when it comes to credit. If you keep these in mind you will have a great score and will be able to do many things. However not everyone is starting from a clean slate and that’s what I want to get into.

Like many others the allure o=f credit has clouded our judgment on what it really is. Most of us were in college at the time and signed up for the credit card in the hopes that you would receive the free T-shirt or hat that was offered. Once the actual card came in the mail we instantly assumed that we could simply use them at will and simply pay it all back at a later date. This was very far from the truth. What we didn’t account for was the interest and how your rates would fluctuate. Now over 50k + in debt or more we have finished with school and decided it’s time to live our lives. What happens next again was unexpected. You get an apartment then realize you can’t get the one you want because of your credit issues. Alter some searching you get a place but have to get new furniture because the lamp from college just won’t cut it. You can’t pay for everything at once so they allow you to get it on CREDIT. You make your payments, and then you realize you need a car… Then a television… Then clothes to go job hunting. This forces you to go and get another credit card to supplement your income so that you can pay for it all. Just buying more and more time… Then poof… You lose your job, the bills are still there and your credit is shot like Ricky in Boyz-N-Da Hood. If this sounds like a familiar story or you can relate in any kind of way the please my brothers and sisters keep reading.

So at this point most of us have given up hope. We don’t even have bank accounts now and use check cashing places, use payday and title loan services, all the while praying for your income tax return so that you can feel normal for at least a month or 2 before you go back to getting raped by the debt monster. You want to go back to having a life, possibly owning a home, a vehicle, or even simply using financial services that don’t cast an arm and a leg because of your poor financial planning earlier in life. You wish you could just hit the reset button… What If I told you that you could? Here’s how… The first thing that you need to do is to pull your credit report. Find out exactly who and what you owe. The next thing to do is to see which debts are still with the original creditors. Many times a debt has not gone as far as the collections stage because of oversight or even the simply don’t use collection agencies. Once those are listed, find out which debts are represented by the debt collectors. A common practice is that a company will not want to keep an account that has been unpaid as to help their bottom line and will sell the debt to an outside agency. (Make sure it has been sold and that the agency does not represent the creditor) Once you have divided the 2 into categories the next step is to CONTEST THE DEBT. Most times large companies are so busy with the current money that is flowing through their company they often forget about the old money that is owed. If you send letters to Experian, Trans Union, and Equifax (the 3 major credit bureaus) contesting that the debt should even be there then the company has 45 day to respond. If the 3 entities receive no response the debt is no gone and your slate becomes that much cleaner. Most big companies and financial institutions will not respond. There may be a couple that do but continued letters rejecting the debt will win out because it cast too much money for the company to research the debt and re-open the account for payment. The 3^rd party collectors are dealing with so much traffic they won’t be able to react fast enough. The only people you need to partially worry about are the companies that buy debt. They will pursue you till the ends of the earth for their money and need to be handled slightly differently.

When you deal with them they will try to collect the balance that you owe, however they will try to offer you a settlement on the amount. NEVER TKE A SETTLEMENT… I repeat NEVER TKE A SETTLEMENT. A settlement means that if you give them an amount of money they will stop perusing you… That’s it. It will still show up on your credit report as a derogatory mark and will negatively impact your score. What you have to do with them is send small payments. They can be as small as you’d like them to be. As long as they take them they have to report it to your credit as good credit against your debts. Only work with them on the balance if the send back payments or refuse to take them from you. It’s best to simply send the money and see if it comes back. This way they have a harder time telling you no.

Now that you have eliminated the debt portion you then have to build from the rubble that you once began your credit journey. Many of you are wondering at this point, how do I get credit when my credit is so bad? Well… Here’s the thing. You won’t get a card from capitol 1 or any other place like that. You will have to build it yourself. First start by purchasing a prepaid debt card that is attached to your social security number. You must use it frequently and always select credit when you swipe it. Using the credit part of your debit card will also help if you have an account. Your cell phone is another big art of your credit rebuilding phase. Get 1,2,3 different cell phones and always pay the bills on time. Never use cricket, boost, or any other pre-paid service. Only the big daddies will count toward your credit score. Make sure that bills are in your name and pay them timely. Never over pay, but simply pay on time. Get department store cards and use them. Again… anything that you can involve credit with, and pay it and on time… Never early. The debt needs the time to show up on your report then it needs to reflect that you paid it. Over paying on credit cards, and paying too quickly in this case is counter intuitive. Since your report only goes back years over a very short aunt of time, all the old diseased credit that infected your credit report will fall off and not be noticed as much as the good credit constantly flowing in. This matters especially when buying a home, getting lower interest rates on a car, better credit cards, and insurance for you and your family. Again I went from a 380 to a 790 in only 3 years or so, and you can to. It’s time we took control of our finances and not let poverty, or racial stereotypes dictate how our lives will be led. Enough discussing the problem with our money and blaming others… I just gave you the tools to become the men and women you should have been and deserve to be. If you have any other questions I will be here to oblige you. Until next time Intellectuals. Complaints speak to the few…