AYF 72 | Credit Landmines

 

If you’re part of Mint’s mailing list, you might have received an email that claims to help you kick off the year with a brand new credit score. Merrill Chandler is here to remind you not to fall into that landmine. In this episode, he discusses how that email is more of an advertisement rather than informative and beneficial for you. He starts off by discussing what Credit Karma is and how Intuit uses it to gather your credit information. He goes on to say how a lot of companies that claim to get you out of debt actually gets you into even more. These are only some examples of seemingly innocent but dangerous landmines that you might fall into if you’re not careful. Don’t be fooled by flashy and too good to be true offers. Let Merrill and his group of funding hackers guide you to becoming fundable.

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A Get Fundable! Look At Mint

I’m ready to talk about another episode of liars, cheaters and thieves. We have got another version of how they’re slipping a roofie to us thinking we’re going to be out cold and unconscious. I’m here to tell you that there is a way to understand how the other players in the funding game work and how they’re using our ignorance against us or they’re counting on our ignorance. We all know Intuit, the accounting software, purchased Mint a few years ago. Some of us may even use Mint. This was a notice that Brad received in some mailings. We subscribed to dozens of groups so that we can stay in touch and in tune with everything that’s going on as part of our R&D. We want to know what new cutting-edge things they’re proposing and what they’re marketing and how we can keep you educated.

What Is Credit Karma?

We all know fundability continues to change. Fundability continues that the rules keep getting augmented and it keeps evolving. With automatic underwriting software and lenders getting more data on how we operate as borrowers, they’re going to continue to evolve their game and we need to know what their playbook is. This is another sample of how that playbook is affecting us. Let’s look at what Mint is because they’re selling us in this thing. They’re saying, “Let’s take off and kick-off 2020 with your new credit score.”

First of all, if you could see my score on this, they’re going to send you to Credit Karma. They’re going to get you to create an account with Credit Karma so that you can see your score. If you’ve already had an account, then it lets you log in. They want us to go to Credit Karma. What does Credit Karma do for us? A whole lot of nothing. Credit Karma uses a FAKO score. A FAKO score is any score that is not used by a lender to determine your approval. Credit Karma uses VantageScore, a score built by the consortium of the three credit bureaus: Experian, TransUnion and Equifax. We’re not going to see our score here because we have other things we want to do, but this tells us it’s one of the offerings. Go and see what your score is and then they log in.

Because you go through this portal, Mint or Intuit actually gets to make money off of everything you purchase inside of Credit Karma. Any loans you go for or whatever, that’s part of the affiliate agreement. You want to see your score and notice, one of the things that you may not be aware of, but it’s fascinating to me is they’re putting 705. What does that tell us? For you, Bootcampers out there, you learned that the average score in America is between 700, 710. For those of you who haven’t joined us yet, make sure you check out the bootcamp.

Go to GetFundableBootcamp.com so you can check in all the details about what some of these things mean. They’re making 705 look average. They’re saying, “I want to see why I’m low.” That’s what they’re intuiting. They don’t say 760. They don’t say 540. They’re saying 705, which is right smack dab in the average credit score in America. They’re also saying, “These are not your numbers. Sign in to see yours,” and that’s where they’re taking it. Let’s see what their real offer is here. They’re going through the offer and notice what they’re saying, “Why are you interested in your credit score?” This is already setting you up to get on lists inside of Credit Karma because this is part of the Credit Karma piece. I want to keep my credit safe. Why is that first?

Fundability continues to change. The rules keep getting augmented and keeps evolving. Click To Tweet

Because of all of the data breaches and people are scared and been led to believe that having your information out there in the world means you’re going to get fraud perpetrated on you. It’s not a 1:1 ratio. The actual number of fraudulent accounts done versus the amount of information that’s out there is a tiny percentage. You can go to GetFundablePodcast.com and look up the podcast where we talk about that. The bootcamp, we do exercises in protecting checklists to protect your identity, but the bottom line is you want to keep your credit safe and they’ve put that at the top because they’ve been fear-mongering again.

Next, I want to apply for refinancing my mortgage. If you become a Credit Karma member through these links, they get a piece. If you do a mortgage through any of the offerings done through Credit Karma. I want to buy or lease a car. Notice your biggest purchases are here. These are all in order for a reason. “I want to improve my credit.” When they say you want to improve my credit, they’re not going to send you to a credit repair outfit. What they’re doing is they’re triggering you for credit offers that are less than perfect. “I want to prove my credit is in admission. Please send me tier 4 junk credit cards and secured credit offers that ruined my credit profile.” Again, Funding Hackers, you know exactly what I’m talking about. Make sure that if you’re not a Funding Hacker yet, join our tribe. Join our community. Become a Funding Hacker. Go to the bootcamp and make sure that you become a member.

“I want to apply for a credit card,” another purchase that’s available through referrals at Credit Karma. “I want to improve my financial health.” That could be a number of different things. I want to apply for a personal loan and I want to get a full credit report. Put in my reason and then their AI will do its best possible version of linking you with solutions for whatever language you put in here. They’re looking for keywords, but they’re looking through this entire thing to make sure that you are outing yourself of what you’re looking for. They want to sell you something but the less fundable you are, the more any one of those things is going to cost.

We want to make sure that you’re fundable first and then we don’t need to go to Credit Karma for these things. When you’re fundable, you’re going to get top of the line, tier 1, tier 2 banks. All the big banks, the credit unions are all going to be begging you to do your mortgage or auto loan and credit card with them. Don’t go out for any old credit card. They’re going to send you a list of credit cards that don’t necessarily benefit your profile and make you more fundable. They’re going to use credit cards that they make the most money from by referring. Once again, we’re in that trap. This is malarkey. This is straight BS. If you don’t know what they’re asking or why they’re asking? You’re going to get hit. These are landmines. Every single one of these can lead to a landmine that is going to harm your profile.

Let’s get to the meat of the matter. In the same email, there’s another one. What it’s saying, the next offer it looks like it’s the same Mint because you’re a Mint member or you’re on their mailing list. It looks like an innocuous customer service opportunity that they’re giving you. Check in, but let’s take a look at the next one. Outsmart, what are they saying without smart? They’re saying you can be smarter than the high-interest credit card debt that you have. I’m saying yes to that, but not by doing what they’re doing here. They’re saying outsmart high-interest credit. Let’s see what that means. Below, it’s Upgrade. Start the new year off strong by resolving to pay off your credit card debt through Upgrade. Upgrade is like Prosper, SoFi and Marcus. All the FinTech companies out there who are using automatic underwriting models and charging higher interest than your standard tier 1 and tier 2. There may be exceptions, but most of these are all tier four offers.

Outsmart Debt

They’re finance company loans. I call them predatory, but they’re subprime. They’re not giving you the best possible rates and terms. Let’s look at why we say that. They’re saying outsmart credit card debt. What do they mean by outsmarting credit card debt? What do they want to do? They want you to get into more debt. They want you to get a loan from them so that you can pay off your credit cards. I’m not saying that’s a bad thing. I’m saying it is a path where landmines are everywhere. Let’s take a look at some of the things that they offer in this. Again, the orange lines are mine and I’m going to try and I’m going to expand this. I’m going to blow this up even a little further. They’re saying apply. They don’t pull hard inquiry unless you’re approved, but they will pull a hard inquiry. Let’s say your actual minimum payment, pay off time and pay off costs of a credit card will depend on the account terms and any future activity.

AYF 72 | Credit Landmines

Credit Landmines: When you’re fundable, all the big banks and credit unions are going to be begging you to do your mortgage, auto loan, or credit card with them.

 

That is how they’re saying outsmart credit card debt because they can’t know what your rates and terms are. Paying off $10,000 in credit cards at a minimum payment may last 23 years. The amortization schedules are insane. What you need to know is that they’re saying, “I can’t know what your credit card debt is. What I can tell you is what you get when you get this loan.” For example, if you receive a $10,000 loan from them, from Upgrade, and that could be SoFi, Prosper, Marcus or any one of these instruments, they’re all the same. You receive a $10,000 loan with a 36-month term. Notice that interest rate, 17.98% interest. Your credit card may only be 18% or 20%. Do the math.

I’ve sent you there twelve times. You, Funding Hackers, have lived there in some of our bootcamp calculations. BankRate.com, look up loan calculators. Put in the numbers of your credit card and see how much you’re saving. BankRate.com looks up the calculators. 17.98% interest, which includes the actual interest rate is 14.3% but they’re charging you 5% on that loan as an origination fee. This origination fee is what they split with Mint or with Intuit. They can get to 1.5, 2 points of that 5 points are shared with Mint for you following this link and filling out an application. I’m not against any of this. I’m saying walk carefully through the minefield. That means $10,000, but you had a 5%, you paid $500 upfront to do this deal.

Those are called points. You have 5% in points upfront. You’re only getting $9,500 in your bank account to pay off debt, credit card debt presumably. They’re not saying you have to pay it off like some mortgages. “We’ll do this deal. With some of the funds, you’ve got to pay off your credit cards.” They’re not saying this, they’re saying get into more debt. They’re saying you can use it to get out of debt. Remember their marketing, they’re not requiring you to pay off any debt. One of the landmines is if you’re not disciplined. You have every opportunity to spend that $9,500 somewhere else for some other reason. Now, you’ve got 14% debt, plus you paid $500 upfront in order to get this money. This is expensive money. 14.3% is basically 5% to 6% less than credit cards. There’s that, but the payment is going to be much higher than your credit cards over the short-term.

They’re saying a monthly payment of $343 in change. That means that you will pay off that $10,000 debt over 36 months. Can you afford the payment amount? Presumably, you can afford to pay the interest rate of your credit card or the minimum payments. This is a public thing, I’m not going to tell everybody the secret of Bootcampers because you remember what we believe about minimum payments. Implement that strategy. Remember that strategy. If you don’t remember, go back and watch the bootcamps so that you’re going to understand what we’re doing here, but you know how to treat minimum payments.

They’re saying, pay $343 every month for 36 months and you’ll pay off that $10,000 loan. You’ve only got to pay off $9,500 worth of credit card debt. The APR of your loan may be higher or lower than that. Your loan offers may not have multiple term lengths available. They may tell you, “You’ve got to pay this for 3 years, 5 years, 4 years, etc.” The actual rate depends on the score, credit usage, history loan turn and other factors. Remember how many times I’ve told you, especially Bootcampers, remember how your FICO score determines rate and many times rate and terms and many times loan amounts. It does not give you approvals. Only a lender underwriting software gives you approvals. How much they charge you are factored into that by using your credit score.

The actual number of fraudulent accounts done versus the amount of information that's out there is a very tiny percentage. Click To Tweet

Upgrade And Fundability

We have an admission that the score impacts significantly how much your rate is going to be and order the terms. There’s no fee penalty for repaying the loan early. It says you’ll get the funds in the mail, but let’s go up to our next little section. The next section is when you check your rate to see what offers you may qualify for, Upgrade performs a soft inquiry on your credit report, that’s all fine and good. Depending on your fundability, they’re going to check only one. Sometimes it’s TransUnion, it varies by lender. They’re not saying here, but they will check your credit score for a soft inquiry. Notice once your loan is funded, they go back and put a hard inquiry to make sure that there were no problems with that particular loan.

This entire process is fraught with landmines. I want to make sure that I’ve included this in Liars, Cheaters and Thieves because they’re saying, “Pay off your debt,” but they’re saying, “Get into more debt.” If you do not go through the stages or the steps that I’ve shared with you, you’ve got to compare the overall cost of the loan for the short-term and long-term. Some real estate investors, it may be worth to stay in your revolving debt because you’ve got to flip pay out coming out and you can pay it all off yourself. Some of you may need something like this. For those of you who are clients, talk to your advisor team because we can show you good loans to buy down your credit card debt in order to raise your fundability, the debt shifting strategy. All you Funding Hackers, remember all of my clients, many of you have already implemented it.

AYF 72 | Credit Landmines

Credit Landmines: You are being marketed to based on their belief that you are ignorant of the rules of the funding game, to the degree that you have participated.

 

If you don’t know these strategies, go to the bootcamp. There are many ways in which you can improve your circumstances by knowing the rules of the funding game and learning how to play like a pro. Next, it’s not circled, but I do want you to see the advertiser’s disclosure. First of all, they’re saying all of this is an advertisement, even though it looks like a customer service email from Intuit’s customers and people on their email list. These are from third-party advertisers. Anything that you provide is not part of a loan nor is that information used for eligibility decisions about you. Meaning you being on a mailing list or anything we have about you is not used in the process. You have to go out and fill an application intentionally for you to execute on any of these offers.

Let’s go back up to the top and close this down. First things first, remember you are being marketed to base on their belief that you are not aware. That you are ignorant of the rules of the funding game. To the degree that you have participated. If you’ve read my book, you’re X-fundable. If you’ve gone to the bootcamp, you’re 2x or 3x more fundable. If you’ve read all the podcasts, you’re 2x, 3x or 4x more fundable. If you’re a client, you’re 10x to 20x fundable. No matter what level you have engaged me, my team or fundability, remember they are marketing to you. You want to be off of these email lists. We’re only on them for R&D purposes. Thank you, Brad, for hooking us up because he’s on one of these. He sent this one in so that we can stay in tune with the latest and greatest from all the great providers out there, all the other players in the funding game. We want to keep you up-to-date on everything that’s important.

Throw your comments in Get Fundable, Facebook, Funding Hackers, Credit Sense, my public figure page. Wherever you’re getting this, make sure that you give a comment. We do our best to get to those every day. I want to know where you are and what you can do. Remember, if you got $8, get my book. I’ll cover the cost of the book. Get my book at GetFundableBook.com. Go to the bootcamp at GetFundableBootcamp.com. Get educated so you can get fundable. Thanks for hanging out with me. We will get this to you and put out those comments and questions because we want us to all have the opportunities that we deserve. You guys are well and have a spectacular day.

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