Bad Credit Is Expensive

Did you know that having a low credit score can cost you a fortune?

It's true. Bad credit is expensive. Hi, I'm Rob West.

With inflation and high interest rates, it's more important than ever to keep your credit score as high as possible, and you won't believe how much money that can save you. I have the numbers for you. Then it's on to your calls at 800-525-7200.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial decisions. Well first off, you should know that the best reason to have great credit is not the money you save, but because God's Word tells us to. Proverbs 3-27 tells us, Do not withhold good from those to whom it is due, when it is in your power to do it. That means pay back your debts in a timely manner if you're able. If you can't, go to your creditors and tell them your situation and ask for more time, or a different payment plan.

Don't hide from them. So let's define what is and isn't a good credit score. FICO, the largest and best-known company determining credit scores, uses a total range from 300 to 850 for its scores. A good score falls between 670 and 739. A fair score is 580-669, and poor is 300-570.

Now, you really don't want to be in any of those ranges if you can help it. That's because lenders determine the interest rates they will offer you based on your credit score. It's one number that can have a huge impact on your life. You want to have a very good score, between 740 and 799, to get the very best interest rate offers. Above that, 800-850 gives you bragging rights, but not much in the way of lower rates. All of this has become a lot more important in the last 18 months, as the Federal Reserve ratcheted up interest rates in a misguided attempt to bring down inflation.

That resulted in much higher rates for mortgages, auto and personal loans, and credit cards. But remember, the higher your credit score, the less you'll have to pay an interest on those balances. So what if you were able to raise your score by just 100 points?

How much could that save you? Well, let's look at how this works with a mortgage first. Let's say you have a 640 credit score. Today, you would probably get an interest rate of around 8% for a $300,000, 30-year fixed mortgage.

But if your score is 740, just 100 points higher, you might expect to get a rate closer to 7%. That means for that same $300,000 mortgage, your monthly payment would drop around $200. And over the 30 years of the loan, you'd save about $72,000 in interest. Now let's look at a 5-year, $5,000 personal loan. Your credit score, again, is only 640. You could expect an interest rate of almost 20%. But raise your score 100 points and that rate drops to about 12.5%. That would mean a drop of $21 in monthly interest, saving you nearly $1,275 over the life of the loan.

Okay, one more, credit cards. Your 640 credit score will get you an interest rate of around 24% today. If you're holding a $5,000 balance, your monthly interest charge alone would be around $100. But a very good credit score, 740 or higher, could get a rate closer to 20%. That would lower your monthly interest charge to $83, saving you more than $200 a year. Of course, we would hope that you're not carrying any credit card balance and that you pay it off in full each month.

That would save a whole lot more. Now, what are some other benefits of having a very good credit score? Well, it can also determine what you have to pay for home and auto insurance. The higher your score, the lower your premiums because you're seen as more responsible. Also, employers now use candidates' credit scores in their hiring decisions. One with a high credit score might be offered a job over someone else, all other qualifications being equal. That also translates into more money in your pocket. Okay, so that's the why for raising credit scores.

Now for the how. For starters, simply pay all of your bills on time and keep any credit card balance below 30% of your available credit. Your score will gradually increase. Now, you might have a low score because you don't have much of a credit history. You can build a history and raise your score by getting a secured credit card. That's a card with a credit limit equal to the amount of money you deposit in a designated savings account and the bank uses it as collateral. It will then allow you to make charges on the card up to that limit.

But don't. Instead, just make one routine budgeted charge a month like your electric bill. Then pay the balance in full when the bill comes in. Again, your credit score will gradually rise.

I hope that helps you understand the impact of having a high credit score. Your calls are next, 800-525-7000. We'll be right back. The opinions offered during this program represent the personal or professional opinions of the participants given for informational purposes only.

Any information provided is not intended to replace advice from a financial, medical, legal, or other professional who understands your specific situation. Great to have you with us today on Faith and Finance Live. I'm Rob West. It's time to take your calls and questions. By the way, we have some lines open today at 800-525-7000. That's 800-525-7000. We'd love to hear from you today and tackle your financial question in light of biblical wisdom.

Lines are open 800-525-7000. Hey, before we dive into our phone calls today, let me remind you, here at the start of the year, folks will often set goals, resolutions that they'd like to accomplish and many of those often near the top of the list involve your finances, perhaps paying off debt or getting that spending plan in place. You know, the key to financial success once we understand that God owns it all and we accept our role as steward or manager and put money into the category of tool to accomplish God's purposes, the key to financial success really success starts with living within our means. You know, we have to have a plan that allows us to dial our spending in such that we're spending less than we're bringing in. That margin is key to not only our just emotional and spiritual health, but also our ability to accomplish our financial goals. Well, you'll never be able to live within your means effectively unless you have a spending plan.

So that's often the beginning point. And if you'd like to perhaps renew your spending plan this year or maybe for the first time begin one, there's no better place to start than the FaithFi app. We'd love for you to download our app today. It's a beautiful smartphone interface, very simple to use. There's actually three approaches to creating a spending plan.

So you'll find one that fits your personality and with a mint going away at the end of last year, it's a great time to check out a brand new solution. By the way, in the FaithFi app, not only can you set up your spending plan, but you can join a community of more than 60,000 stewards on the journey with you, enjoying the content, asking questions, sharing ideas in our community. And it's all there for you to check out today.

When you go to FaithFi.com, just click app or head over to your Apple App Store or Google Play Store and just search for FaithFi, faith and finance. All right, let's dive into your phone calls today. I'm ready and we're going to begin in Clemson, South Carolina. Mike, go ahead, sir. Yes, sir. Thank you very much for your ministry and your staff's ministry.

It's a blessing. And I would like to ask about, he has a different custodial accounts. I have enough money to actually get an advisor, a CKA to help me and it would be greatly a big help to me. And I think I found one close by and he does use Charles Schwab and I'm just curious about a different custodial accounts. Are they pretty much can you have a faith based type of investing?

And I'm just curious. I, you know, I know you can't be perfect in all your investing and everything, but generally would you kind of would I be able to stay away from like the Planned Parenthood or a pharmaceutical drugs that cause abortions and, you know, things along that line. And I'm just wondering if Schwab Charles Schwab would be a good one, you know, as far as. Yeah, absolutely, Mike.

That's a great question. And yeah, you'll find that Schwab and Fidelity, among others, are some of the more popular brokerage firms that a fee only registered investment advisor might use. Others would include Edward Jones or LPL or even the big wire houses like Merrill Morgan and and others. And yeah, you absolutely will have plenty of access or your advisor will have plenty of access to the faith based investing fund families. And the exciting thing is, Mike, that this whole space of faith based investing, that is selecting investments, either selecting individual stocks or buying a mutual fund that is faith aligned. That whole space of faith based investing is really just taking off.

I mean, there's fifty five new products, so new ETFs, new mutual funds just in the last three years. And these are world class investments getting phenomenal returns, very consistent with what their peers taking a secular approach might find, but where they're intentionally aligning the investment selections, the deployment of capital, your capital with Christian values. And that includes both avoiding companies that are misaligned with your values. You mentioned a few of those categories or or in addition to that, they will also select intentionally companies that are promoting human flourishing or, you know, really focusing on a kingdom impact outcome. So yes, Shaw Schwab will be a great platform for that. The key is to have that advisor who has as a part of his or her practice the ability to select faith based investments based on your values and working with you to build a portfolio that's consistent with that.

But nothing about Schwab would prevent the advisor from doing that. OK, that's wonderful. OK, well, thank you very much for for that input. All right, Mike. God bless you, my friend. Thanks for being on the program today. Let's go to Ohio. Hi, Christie.

How can I help? Hi, how are you? I'm doing great.

Thanks for your call. I just wanted some information about my son. He's 17. He lives at home. This is his first job and he makes about thirty thousand dollars a year and he has no bills. And he's wanting to know what he can do to invest his money to make money off of that money to, you know, absolutely. Well, I love that he's thinking about that now. I think the key is for him to start learning early God's way of handling money.

So when you're done here, hold on the line. I'm going to send you a copy of Howard Dayton's book, Your Money Counts. I want you to give that to him as our gift to him just to begin to introduce him to not only wise, you know, money management skills, but also how God's word speaks to just the whole topic of finance and how we ought to think about managing God's money. Secondly, I think the next step is to really earmark this savings that he's accumulating. And that's great for specific goals. So he might have an emergency fund bucket where he's got maybe a thousand or two thousand dollars because he probably doesn't have a lot in the way of expenses.

That's just purely for the unexpected. And then he might have a couple of additional savings buckets that are for a specific purpose. So he might be looking down the road to when he was moving into his first apartment or he wants to buy a house or he needs to replace a car. If he has any of those, he ought to save for those along with the emergency fund in a high yield savings account. He can get four and a half percent right now with an online bank, with FDIC insurance.

And at least he's making some money, even though it's liquid and safe. Now, beyond that, given that he's working, the very best tool is a Roth IRA. And, you know, this will be a way that he can put in after tax dollars into a Roth IRA.

And, you know, this year, 2024, the contribution limit has gone up five hundred dollars. So he can now put in up to seven thousand dollars in 2024, as long as he has that much in earned income, which it sounds like he does. And what I'd probably do is just open an account at Fidelity or Schwab. He could use one of their robo advisors like the Schwab Intelligent Portfolios, very low cost, and he can even set up an automatic transfer into that Roth IRA every month. And then it would systematically invest it in some index ETFs. He could also look at what I talked to the last caller about, and that is some of the faith based investing funds, which, again, there's some wonderful funds out there like Eventide and One Ascent and Praxis and Guidestone and Timothy and others that are specifically choosing investments that align with your Christian values.

And they have wonderful performance. And you could find those fund families if you click on the show when you visit our website at faithfi.com. But I like this idea, Christie.

I'd start with the emergency fund, then planned savings buckets and then finally a Roth IRA and have him set up a systematic contribution there. Hey, stay on the line. We'll get your information to send you that book and we'll be right back. Thanks for joining us today on Faith and Finance Live here on Moody Radio. I'm Rob Lest, your host, and we're taking your calls and questions today on anything financial. We've got some lines open. You can call right now. 800-525-7000.

Let's head to Pennsylvania. Hi, Steve. Thanks for calling, sir.

Go ahead. Well, hi, Rob. How are you? I'm well, thank you. Good. Thanks for taking my call.

So the question is pretty precise. I just started, was forced to retirement, and I'm trying to figure some things out. I have a 401k about 40,000. I have a car debt.

What's left on it is 7,000. Is there a way to withdraw slowly from the 401k and not have it being counted as income? Because that would also affect my, if my income goes up, my benefits from the state for insurance go down. Is there a way to withdraw from the 401k to avoid that being counted as income?

Yeah, there really isn't. Are you still working with this employer? No.

You're not. Okay. So you're fully retired? Yes. Okay.

Yeah. Any money, although when you get beyond 59 and a half, there's not going to be any penalty. Any money that comes out as a distribution will be added to your taxable income for the year. I mean, the only way around that would have been while you were still working. You could have considered borrowing from your 401k and then you'd pay it back, although that's not a deal because you're paying it back with after tax dollars, even though you're paying interest to yourself and it's being deposited to the account. I'm not a big fan, but that would have been a way to do that without it being taxable. But once you separate from employment, you don't have that option either.

So there really isn't a way to get it out for anything other than creating a taxable event. What is your age, Steve, if you don't mind me asking? 63. 63? 63, yeah. 63.

Okay, yeah. Once you get over 70, we could roll it to an IRA and if you had money you were contributing to your church or to a ministry out of savings or your checking account, you could replace that with money coming out of your IRA through a qualified charitable distribution and then use that cash that you would have contributed from savings to pay down the car. That would be the only creative way that you could get that money out because that doesn't become a taxable event through a qualified charitable distribution. But that's only available once you reach age 70 and a half.

So at this point, if you want to use that money to pay off the car, it's going to have to be added to your taxable income which, as you said, could create problems even beyond just you having to pay some taxes. All right, okay. All right. Thanks for calling, Steve. Absolutely, sir. God bless you.

Let's go to Joliette, Illinois. Nancy, how can I help? Hi, thank you so much. Happy New Year. Thank you for having me. Happy New Year. Well, thank you. You are most welcome.

We appreciate you. In a nutshell, as my husband and I approach retirement, we are streamlining our finances and we have been slowly, according to your advice, cutting out some of our credit cards and things like that. We don't carry a balance on any of them, but we have kind of accumulated some more over the years. And my main question is, for me as not the main breadwinner, what is the best way to maintain my own credit? I did purchase a vehicle several years ago and thankfully, you know, put like $10,000 down and got 1.9%, and that I'm sure has boosted my credit score. At that time, they said in my particular, I had bought it in just my own name.

My score was perfect, which I was surprised to hear. But anyway, and our general score together is over 800. But I just, you know, should I just keep one credit card in my name and one in his? Is that sufficient?

Or what would you suggest? Yeah, so if you're specifically thinking about your credit score and not access to the credit card, if he were to pass away, which is a whole separate issue that we can talk about in a moment, but specifically related to the credit score, you don't even need to have one in your name as long as you're an authorized user on his, because it'll be reported to your report at the same time it's reported to his with you as an authorized user. So if you didn't want to have more than one card, you could have him as the authorized user or you as the authorized user and him as the primary or you could hold it jointly either. In either case, it would be reported to your credit file. And with regard to your credit score, having that, you know, active account, even if it's just a small charge every month, it's a budgeted item that you pay off in full, you know, that ongoing regular activity of you showing yourself to be an on time payer is really key. The other key is the credit mix, which is 10% of your score. So the idea that you would have a revolving account, which is a credit card and an installment account like a car loan, that's a, you know, that helps your credit mix because it's two different types of credit.

So that would be all you need to do. Now to my second point though, the only issue with that, and this catches folks by surprise in some cases, you know, if something were to happen, let's say the Lord calls your husband home and you're an authorized user. Now that card can't be used any longer. And although you can go out and get one in your name, it's going to take some time and it may cause a disruption. So there is a case to be made about you each having a card in your name with perhaps the other as the authorized user, even if you just use it, you know, on a very minimal basis every month.

Does that make sense? Okay. Yes, that's exactly what I was thinking. So that would primarily be enough. We're not planning on taking out any loans or anything as far as we're not particularly concerned about, you know, the level of our credit score right now. But yes, that was my concern because I just realized that I wouldn't, as an authorized user, I would not be able to use any of the credit cards that are mainly in his name, which are the higher credit limits as him being the main breadwinner. So, but if he were to pass away, yes, yes, correct. Correctly, as long as we each have one in our own name, that would be sufficient.

It would because that would mean if again, we're talking about something we don't want to talk about, but we got to be well planned, right? So yeah, if he were to pass away, you would have a card that you could continue to use on an ongoing basis. If we're just talking about the credit score, you being an authorized user is sufficient because that will be reported to your report. But as you said, in this season of life, probably not a whole lot of concern about your credit score anyway.

I mean, anything above 740, you're going to qualify for the very best credit rates and terms out there and you're probably not looking to borrow a lot of money in this season of life. So it's really a non-issue, but yeah, not a bad idea just to be mindful of it and make sure you've got a sufficient score on your own. Hey, all the best to you, Nancy. Thanks for your call today. We appreciate it. Well, folks, we're going to take a quick break. Can we come back Rod in Chattanooga and Stacy in Tampa?

Plus your question right around the corner. Stay with us. Well, thanks for joining us today on Faith and Finance Live. I'm Rob West.

This is where we apply the wisdom from God's word to your financial decisions and choices. We've got two lines open here on the broadcast today. 800-525-7000 is the number to call. Let's go to Tidewater, Virginia. Joe, thanks for calling, sir. Go ahead. Hey, Rob. Thanks for taking my call.

I appreciate what you do. My question was about refinancing a mortgage or a recent home buyer and we were able to put a significant amount down, but we're in a 30-year mortgage, right about a little over 5.5%, 5.65. Oh, about 140,000 on the house. That's about 18% of the value. And I was wondering how, if you give me your perspective on how I should think about refinancing and at what point that becomes a wise move. Yeah, it's a great question.

I love that you were able to put so much down, Joe. And yeah, I mean, obviously with rates where they are now, you're not excited about that 5.625 rate. And so it could make some sense, especially given that this is a 30-year loan for you to refinance.

Probably going to not be next year. It would probably be the year following before it would make sense, but let's talk about that. Do you anticipate, Joe, first of all, being in this home for a long time, based on what you know today? I do, yes. Okay. What is your age currently?

54. All right. So this could be in effect your retirement home, right? Correct, yes.

All right. And would you anticipate paying this off at a more aggressive rate than the 30-year amortization, or do you think you'll just let it play out with the consistent monthly payments? We've been saving, and we're reducing the principal by about $2,000 a month. So yes, paying it off at an accelerated rate. Okay, so $2,000 in addition to the scheduled monthly payment? Okay, great.

And have you run the amortization schedule to see how much quicker that would allow you to pay this off? Not that I could give you an answer. I just, I know that that is, that I suspect that is true, but I don't know how much. Yeah, exactly.

Okay. I mean, let me just run some quick numbers here. It looks like that you could pay that off with an extra $2,000 a month starting this month, $5.65, $140,000. Looks like $2028. So, you know, here we are, $2024.

So I mean, we're talking within four years on your current track, you could have this paid off, you know, which is great. Now at $5.625, you know, you're going to end up paying a total of $46,000 in interest if you were to continue this $2,000 a month. Normally we say you'd want to be able to save a percent and a half. So that would be, you know, $4.125 would be when you'd want to refinance. And if you stay on this current track, but we dropped the rate to $4.125, you know, it looks like, well, excuse me, I made a mistake there. So $5.6, let me just do some numbers here real quick. Looks like your total interest is about $20,000 that you would pay. A total of $46,000, including principal and interest, but the interest only portion would be about $20,000. And at $4.125, you would pay a total of $14,000 in interest. So you'd save about $6,000.

Now here's the kicker though. The cost to refinance can run anywhere from 3% of the loan all the way up to six. So that's anywhere from four to $9,000 on a $140,000 loan.

Now I realize it's coming down quickly and so that number will change. But if we just look today at you spending, you know, essentially, you know, $5,000, let's say on the low end to refinance it in order to save $6,000 in interest, given how quickly you all are going to pay this off, it just doesn't make sense. So you'd probably need to save, you know, at least a couple of percentage points and you'd need to do it in the next, you know, 12 to 18 months in order to make this make some sense.

But at the end of the day, you know, you're probably going to find that just given how quickly you're trying to pay this off, there's just not a whole lot of reason for you to make the extra effort to refinance it, just given the cost that goes along with that transaction. Does that make sense? It does make sense. And I appreciate you articulating that. I was wondering how that would break according to what you and Larry Burkett and others have articulated. So thank you for answering that.

Well, you're welcome. If you want to go, I just pulled up the calculator.net amortization schedule and it'll allow you to play around with this and you can put in your 30 year loan, your current rate, your extra 2000 a month, it'll show you exactly how much total interest you're going to pay. And then you can, you know, move that rate around and just see what is that sweet spot. But we're probably not going to see rates in the fours next year. So this is a decision that, you know, you'll probably consider in 2025 at the earliest.

And at that point, we'll just need to rerun the numbers and say, okay, if I'm going to spend between five and $9,000 to refinance it, what's that magic point where it makes sense for me to spend that money? Because I'm going to save at least a few thousand more in interest between now and the end of 2028, which is when you'll have this thing completely paid off just based on that extra $24,000 a year you're sending. All right. Great. Thank you, Rob.

Awesome. You're welcome. Joe, God bless you, my friend. We appreciate you calling today.

Quickly to Chad Anuga. Hey, Rod, how can I help? Thank you for taking my call.

I appreciate it. Because of TV commercials, I've got two questions. If I have my credit account or credit, you know, score is all frozen, is it still wise to get something like that lifelock thing or is it even necessary?

You know, I'm not a big fan of that, Rod. I mean, if your information was compromised somewhere and they offered to pay for lifelock for you, you know, just as a way of trying to make good on the fact that they allowed somebody to come in and access your information, I'd certainly take it. But if you're having to pay for that yourself, there's just not a whole lot more there, in my opinion, that they offer now. They may offer you some insurance if you need to, if you have identity theft that harms you financially. But apart from that, I think you, you know, doing what you've done and that is, you know, freezing your credit, which means nobody can open an account fraudulently in your name because they won't be able to allow the lender to access your credit file without that PIN number. And then if you regularly pull your credit file just to monitor it, you're watching your financial accounts, your credit cards, you're looking for erroneous transactions, you know, you're changing your password regularly, you're not getting on public Wi-Fi to log into your bank or your credit card, those kinds of things. You're not clicking on links in emails or giving out your personal information over the phone. You know, those things are free and they're probably, you know, the best things you can do to protect yourself. For me, just, you know, based on my experience, taking that extra step of paying somebody to do essentially the things I can do myself free, it's just unnecessary.

Well, that's kind of what I thought. I thought if I had my account frozen, I didn't see a sense of spending money for something along the line of lifelock, but I've seen a lot of advertisement on TV about it, so I thought I'd call and ask. The other thing is I've seen advertisements also for home mortgage insurance or home, home insurance, title insurance, so no one can take your title, whatever. Yeah, I wouldn't, definitely wouldn't do that one because there's really nothing they can do. Keep in mind, if somebody goes into the county records office and fraudulently changes the deed and then they try to foreclose on your home, that was fraudulent conveyance and they have no claim to your property and you can probably contact your county records office. A lot of them are doing this now and ask them to put an alert on your account that if anything changes with regard to your deed, you're automatically notified.

So this idea that you would have some sort of title lock insurance, which is a misnomer, I think is a waste of money. Hey, Rod, thanks for your call today, my friend. We appreciate it. Hey, we're going to take our final break of the program today and then back with our final round of questions.

Stay tuned. Great to have you with us today on Faith and Finance Live. I'm Rob West. All right, we're going to take our final set of calls here for the day and we've got some great questions coming up. Let's go to Tampa, Florida. Hi, Stacey.

How can I help? Hey, Rob, how are you? I'm doing great. Thanks for your call. You're welcome.

Thank you for taking my call. Yes, I had a concern about a vehicle that I have. So right now it's finance for within two years, but I was in car accidents, a couple of wrecks.

My last one was back in February. So of course that caused my insurance to be now close to $900. So with my car payments and insurance in total, I'm paying roughly $1,300 for a car and that's more than just one paycheck that I make in two weeks. So it's not making sense for me to keep the car. So I've been talking around, I just want to know what's the best option if I should return the car to the loaner and just be responsible for the rest that's owned because since I broke the lease, they add the lease on top of the finance car. So the car is worth more than what it's really worth. So I'm like really stuck in a sticky situation.

I'm not really sure what to do. All right. So you've got a lease here and you've got two years left on the lease, is that right? I had a lease, but I had broke the lease at the dealership to get a finance car because I had mentors at the time and they advised me to do that. Okay. And then they put that on top of this car that you financed through them. I see. So how much do you owe on this car today?

I owe about $23,000 less on the car. Okay. And have you run a private sale, Kelley Blue Book or Edmunds value on it? Do you know what it's worth?

On the last time I did it, the estimate was like $11,000. Oh, wow. Okay. All right. Yeah. Yeah.

Okay. So you've got a couple of options. I mean, number one is you just continue to make the payments and you drive it until you pay it off. Obviously, just given how high it is because of the car insurance.

Now, that's not going away. I mean, you could shop this around and see if another insurance carrier to win your business might come in lower. Even though it may go up over time, it might be worth shopping around. But because of your recent accident, there may or may not be able to improve that. But that's going to follow you obviously. And so you're going to need transportation if you were to, let's say, turn it in. And I'm not saying you necessarily should because that's going to result in you having this deficiency balance between what they're going to sell it for at auction, which is going to be a lot lower than the $11,000 and what you owe.

And if you don't pay that, then they'll seek a judgment against you. And that could get pretty messy. But let's say you were to turn in the car. What would you do to get to work and so forth?

What's your plan at that point? When I was speaking to my mom and my boyfriend's brother, because him and I work at the same facility, it was an option to carpool with my brother-in-law to work. But then that would mean for me to move into my boyfriend's place. And then my mom also suggested for me to get a scooter to drive around because my job is only about 30 minutes away. But then again, I would still have to pay for a scooter and I would have to do shopping for a scooter. But those are the only two options.

And of course, using Uber and Lyft to get everywhere. But when I did the math, that was roughly like $1,000. Well, I would say let's not pursue the plan to move into your boyfriend's place. Let's try to keep you on your own. And I think you're exactly right.

I mean, you're going to have to get creative here. Maybe it's the scooter option. When you do your budget, are you able, let's say you weren't to have the car payment and the car insurance? Do you have a surplus every month at that point?

As of right now with me trying to pay, I have credit cards and I don't pay that much in rent, but I do have to give my mom money to help out with rent. Right now, if I'm going to be frank, I only have $20 in my account right now and I just put $35 worth of gas in my car to fill it up. And I get paid on Friday. My next paycheck is on Friday. But then that Friday, I'm going to put like $800 towards my car for this month's payment and last month's payment since it was late because of Christmas and me buying presents and things like that. Yeah, yeah.

Yeah. I mean, obviously, it's a really difficult situation because there's just not a lot of money there. I mean, your expenses I expect are as lean as they could be given that you're living with your mom, even though you're contributing a portion toward your housing expense.

This car obviously doesn't fit into that and you're way upside down on it. So let's do this. I think it really is going to involve someone helping you kind of dig into those numbers and just trying to help you create a path forward. It may involve you having to get bankruptcy protection, but that's an additional expense, even if you try to make good on paying all of this off over time. So I think the next step is just to have somebody walk alongside you as you get all the numbers in place.

Look at all of the different options. See if we can get the credit cards into a credit counseling program. See if we can work with your lender to perhaps turn this in and get you on a smaller payment plan. Look for a scooter or maybe somebody. Let's just start praying about this.

Maybe somebody at your church would be willing to bless you with an old car. I mean, we need to trust the Lord in this. You need to do your part the best you can. And let's just see how the Lord shows up in the midst of this very difficult situation. But what I would say is let's continue to honor him with each of your decisions. So not moving in with your boyfriend, really continuing to trust him and be faithful with what passes through your hands. So you're doing your part to just live as lean as you can.

Look for other opportunities to bring more income in, whether that's picking up a second job or maybe finding something you can do where you're working remotely from home so you're not having to commute and save that money. I mean, we're going to need to get creative here. And obviously the Lord is going to have to intervene in a very difficult situation. So let's do this, Stacey. I'm going to ask you to hold the line and I'm going to put one of our certified Christian financial counselors in touch with you just to work through your financial situation.

There's not going to be any cost to this. We'll pick up the cost for it. And let's just see if the two of you can't come up with a plan to get you pointed in the right direction. And we're going to trust that the Lord is going to intervene as well along the way, because ultimately our trust is in him, right?

Because he is your provider, no one else. So hey, keep us posted and we'll be praying for you. I'll ask our money or excuse me, our faith and finance community to be praying for you as well. And thanks for your call.

Let's go to New Jersey. Hi, Carmen, how can I help? Hi, Rob. Happy New Year's. Happy New Year.

Hello. Yeah. So I have a, my husband's FICO score, we have a credit card with a Citibank Costco card and his FICO score under their program is reflecting like a 598 score. And so we immediately went to the three credit bureaus and Experian is reporting that there are no, there have been no changes to his credit score. He has always had like a high 800 score.

Right now he's at 826. But when they, when they were... Uh oh. Carmen, did we lose you? Hello? Yeah, you're back. Hello? Yes, ma'am.

Oh, I'm sorry about that. Did you get any of that? Should I repeat it? I did.

No, no, you're good. So I heard that you went and pulled the Experian. It said no changes. Did you pull any of the other credit files?

Yes, all three of them are reporting that there have been no changes. We currently do not have a mortgage. We don't have any car payments. We pay everything to zero balance. So we've always had really high credit scores in the 820s, 830s.

All right. Since September, Citibank Costco card that we've had for years is all of a sudden reporting that his credit score has dropped to like 598. And I spent like a month or so trying to figure this out, going in between Experian and going in between Citibank Costco card. But they're saying that that is what Experian is reporting. And Experian is telling me, no, that's not what we're reporting. There's been no changes to your husband's credit score. So I'm in the quandary.

I have no idea how to handle it or where to go next. Yeah. So what I would probably do is go back to whoever gave you that 500 credit score and find out what I'd get them on the phone and find out what they used to determine that. There's the Vantage score. There's the FICO score. There's three different credit bureaus. So there's a lot of different ways to get to your credit score. You don't just have one credit score. Your credit score is just based on the information in the bureau that was used running through a formula or an algorithm.

And they're not all the same. So, you know, depending on which of the three bureaus they used and depending on which company ran that score and what scoring algorithm they used can produce different scores. And so there's probably one of those three that has some information on it that's either inaccurate or there's a fraudulent account on there or an account you forgot about or didn't know about that's in arrears. There's something there that, you know, is triggering that low credit score and you need to find it. So I would go to annualcreditreport.com. I'd pull the three reports.

Don't pull the score. Pull the reports from the three bureaus and just look at them. And they'll tell you at the top of the report the, you know, the three most significant things that are causing your score to drop. And you'll be able to see right there on the report what it is that the bureau is saying is working against you, if anything.

And they have to give you the three factors that are working most significantly against you on the report. It's a part of every credit file. So I'd pull those files, not the score, but the files at annualcreditreport.com. Get one from TransUnion, one from Equifax, one from Experian, and just see what they're saying in your file is the most detrimental to you at this time. And if there's nothing there, then don't worry about it because at the end of the day, if your FICO score is over 800, you're in great shape. If you want to do a little bit more digging beyond pulling those three bureau reports, I'd find out from whoever gave you that 500 number, how do they go about pulling a credits file and get them to give you more details on the process that they used.

And that may help you narrow down the options. At the end of the day, you might find that it was just an erroneous score and maybe they just gave you bad information, but I think you'll find the answer to this, Carmen, if you do a little bit more digging. Hey, thanks for your call today. We appreciate it. That's going to do it for us today, folks.

Faith in Finance Live is a partnership between Mooney Radio and FaithFi. Thank you to my team today, Dan, Amy, Jim, and our call screener. We'll see you next time. Bye-bye.