

Get The Tea On The Good, The Bad, And The Ugly Of Your Credit Score
Didn't know April is Financial Literacy Month? Well, now you do. And what better excuse to get your finances in check or figure out how you'll add to your already lit bank accounts? Let's get into some knowledge about credit. It's an issue we all face as we look for ways to reach financial freedom and the best road to where the money resides. Sadly, the stats reflect harsh realities for many of us. Fifty-four percent of Black adults report having no credit or a poor to fair credit score (below 640).
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Carmen Perez, Varo Bank's personal finance advocate and creator of MakeRealCents.com, a financial fitness platform, shares the good, bad and ugly on credit. Perez, an award-winning professional who's worked for Citi and Morgan Stanley, successfully paid off $57,000 of her own debt in less than three years.
"My finances were a hot mess up until I was able to commit to a plan," she shares. After facing a lawsuit from a private lender, she had to use her last bits of savings to hire a lawyer. She readjusted her budget, completely cut out luxuries like eating out and investing in cable, and reinvested her time into a photography side hustle to bring in more cash. She also kept a close eye on her finances and savings via the cash envelop system, and by the end of 2018, she was debt-free.
It's always good to know where you are before creating a plan to get to where you want to be. So, let's get into some credit 101:
Your Credit Score: The Basics
A credit score, also referred to as your FICO score, is a number that lets lenders know how much of a risk it would be to lend you money. The score ranges from 300 (the lowest) to 850 (the highest). "It is a benchmark that lenders use to gauge how likely a person is to pay back what they owe based on past data. The more you pay things back and on time, the better your credit can be, which can help you borrow money at a lower rate for things you may need," Perez says.
There are three major credit reporting bureaus, TransUnion, Equifax and Experian, and each uses different reporting methods, thus you could have up to three different scores.
"The misconception is that we have one credit score, which is inaccurate. We have multiple, and it depends on what we're applying or aiming for," Perez says. "Your bank, for example, could be showing you a FICO score that might be conducive to opening a credit card, but your score might be different when applying for financing for something else."
Also, various things can impact your credit score, from late bill payments or rental debts to outstanding medical bills and tax liens. On the positive side, a long history of maintaining accounts in good standing, or taking on debt that you're able to manage and pay back consistently over time, are all actions that can contribute to a great credit score.
You can access your credit scores for free via AnnualCreditReport.com, and each report will have specifics on the types of accounts you have on record (such as credit card, mortgage, and student or car loans), the date those accounts were opened, information on your credit limits or loan amounts, as well as details about your payment history. Credit reports also have history on where you've lived and sometimes where you've worked. You'll want to make sure all information is up to date and accurate, especially since some information could be from fraudulent activity, a reporting misake, or an old debt of more than several years that should have dropped off.
For more information on your credit reports, look into resources offered by the credit bureaus, including apps that offer weekly updates on your credit score, credit report information, and credit products available to you. Other easy-to-use and super-helpful websites on understanding your reports are CreditKarma.com and USA.gov.
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Your Credit Score: The Good
The benefits of having a "good" credit score, which is one that falls generally at a 700 or above, is access to more housing options, more confidence when applying for a loan, and lower interest rates when you get approved. "Good credit allows you to secure better housing and, in some cases, will enable you to bypass having to put a deposit down if you rent," Perez adds. "If you plan on owning, good credit can help you secure a mortgage with better financing terms for you in the long-term. The lower your interest rate, the less you'll pay in interest over time."
"You'll feel less worried about getting denied, which can help you focus more on the things that matter, like negotiating a good interest rate."
But what about if you have no credit at all (i.e. no active accounts being reported to the credit bureaus or your credit history is so limited that there's no score)? Perez recommends getting a secured credit card, one that requires a deposit but offers other great benefits for people who haven't built credit.
"Get one at bank or financial institution that you're looking to have a long-term relationship with---one that offers access to other products. You might put up $500, for example, to open the account, and it will give you access to other products later that you might find beneficial such as home and auto loans."
She also urges women to put some serious thought and research into making decisions about what cards might be best for them. Looking to resources like Nerd Wallet or reading up on your current bank's credit card options (along with the fine print) are your best bet. Be sure to get details on annual fees, card closure policies, and payment protocols.
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Your Credit: The Bad
In some cases, with a credit score that is below 640, a lender sees you as a higher risk for default or nonpayment of a loan. "If you haven't been good at paying back the money you've already borrowed, lenders will be more hesitant to lend you money," Perez says. "Since they are lending you the money, your loan terms, whether it be a mortgage, car loan, or credit card, will be more favorable for the lender than they will be for you. And since the lender is taking on all the risk, their reward is being able to charge you with a higher interest rate. Interest over time can add up and take away money that could be going toward your future self, like investing for retirement."
Though cash is king, when it comes to buying a home or even renting an apartment, you may need a cosigner to vouch for a loan. "Getting someone else to cosign on anything can be pretty tricky, especially when you already have bad credit," she continues. "You may also be subject to paying high deposits, which can deplete you of cash that could be going toward things like your savings or retirement."
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Your Credit Score: The Ugly
In Perez's case, she was sued for an outstanding debt, and this is a common practice for some lenders as well as medical service providers and property management companies. Accounts that have reached collections stages and wage garnishments can not only deplete your pockets, but they can indeed negatively impact your credit score. A bad credit score can even affect your employment opportunities. "Sometimes employers will run a credit check on you before giving you the job," she says. "If your credit isn't in a good place, they may not extend the offer."
But you can take bad credit and turn your situation around. Perez recommends looking at all your credit reports and disputing anything that might be out of date or inaccurate. Then address the open accounts with balances that are past due. "Get on the phone with your lender. Explain your situation. See if they have a hardship program, and get the information on what that actually looks like. Get those details up front first, and then go from there." Perez also suggests freezing your credit card and pausing on use versus closing them, something that could negatively impact your credit. If possible, remain in communication with companies or lenders you owe to negotiate a plan for resolving your debt. "If you get the no the first time, continue to call to see if you can get yourself on a payment plan. That's better than [the lender] hitting up your credit because you're not making payments."
There are also credit-card debt relief options offered with the understanding that many are facing pandemic-related hardships, and community resources to get help in building budgets or exploring other debt-relief options.
Perez is also a big advocate of finding a way to earn more income via a side hustle and paying down at a pace that takes into account your current lifestyle and necessities. "Make sure you're prioritizing your bills. If you're in a hole and trying to make it out, it's time to put a budget in place and figure out where your money is going."
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Revolt TV's Alison Threadgill Talks Career Pivot And Changing The Game In Entertainment
Switching things up in our careers---and thriving at doing so---is nothing new to us. Since, as ambitious Black women in our own right, we're often tasked with challenging ourselves, pushing ourselves past the status quo, and fighting to live out the best careers we can.
Alison Threadgill, senior director of talent relations at Revolt, made a pivot from serving as a publicist to working with top entertainment personalities in talent relations, and in her more than 15 years of experience, she's been able to elevate through the ranks of entertainment---previously at TV One and its sister companies Radio One, iOne, Reach Media and One Solution.
"I get to cast and highlight artists and creators and cultural leaders who are really driving the culture forward," she said. "At Revolt, we are very unapologetically hip-hop, and so I'm always searching for fresh voices and undiscovered artists. Revolt really is a platform that's for people like that to be showcased to the world. ... It's exciting to work in this world where I have the opportunity to really elevate Black voices and Black audiences."
I caught up with Alison to talk about why she chose to shift from PR to her current post, how we can all truly lift as we climb--even in industries that might have reputations for being super-competitive, and how she's working the job of her dreams to the max.
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xoNecole: You mentioned pushing the culture forward. What does that specifically mean for Revolt as a network?
Alison Threadgill: One of the things that makes Revolt unique is that we represent a very Gen Z and millennial voice. What the status quo is, is not what we're about. We are sparking conversations that are going to bring about change, to make people think differently, to get people to realize that just because something has been a certain way, doesn't mean that's the way that it should be or should continue to be. We pride ourselves on being very disruptive and bringing about voices that showcase that.
We have a new show that's coming later this year where there will be lots of different voices.
We're coming up on an election year, and so being able to have voices in our community that are talking about issues that are important to us and understanding that there's a lot wrong in the world, our people are so often overlooked and mistreated, and so what do we as a community need to do to really impact change? Who are the people we need to empower who are not just going to give us lip service but are actually going to do things to create change?
It's about starting those conversations and understanding, for our audience, that Revolt is a place you can come to hear that and see that.
xoN: You pivoted from PR to talent relations. What transferable skills have helped you in doing so?
AT: One of the things that is a skill set that you have to have for both is working with very different personalities. Working in PR, I worked very closely with talent all of the time. I think that was probably the key skill set between the two---understanding that, especially in the celebrity world, you can work with very challenging personalities, whether it be on the management or agent side, to the talent themselves. Just understanding how to work with all kinds of personalities to be able to get your job done, I would say, would be the No. 1 skill between the two.
xoN: What advice do you have for young women who want to pursue a pivot into talent relations?
AT: Can I speak to entertainment in general? This is something that can work in both. I think one thing that a lot of people---especially for [those] who are not in large markets--a New York, an Atlanta, an LA--it can be daunting. How do I break in? [It's by] volunteering, even with something at the local level, so that you're gaining experience in entertainment. What you're doing as a volunteer may not be something you absolutely love, but it's giving you the exposure to all these other entertainment jobs, what other people are doing, that you didn't even know existed that interests you. Volunteering is huge in figuring out what you want to [do] and giving you exposure to other areas.
The other thing that I think we don't do enough, especially as Black people---and sometimes as women--- is using our network---talking to your network. Telling your friends, colleagues, and associates about things that interest you in entertainment.
It's important to put yourself out there because if people don't know, they can't help you. It may not be a situation where it's something they know about, but a friend of [a] friend might mention that they're looking for somebody or know somebody.
It's easy to not share because you assume people may not be tapped in, but you don't know who they know---so just really be open to putting yourself out there. So much about this industry is about relationships, and doors open because of your relationships.
Also, using LinkedIn as a tool if you don't know anybody in entertainment or there's a role you're interested in.
Featured image by Shawne Turrentine/Art Trends LLC