Think Like the Banks

Hello, and welcome to this module, Thinking Like The Banks. So up to this point, we have covered a lot of ground in terms of putting yourself in the best position to win with your credit. Now, this is a transitional week because now that we’ve done everything that we’ve done, I want to start to give you the mindset behind how the banks view you. So here is what we’re going to cover in this particular module. So the first thing we’re going to get into is how to maximize this week. So it’s pivotal that you get this right out the gate. I’m going to give you an assessment as well. So that way you can ensure that you maximize other results in this week and the appropriate time to use and apply the principles in this week. I’m then going to break down the type of financial institution, specifically lending institution.

So, you know, and really the type of institutions you should be seeking with your particular lending and financial transactions. I’m going to break down the 4 C’s of lending and why this is important. Um, additionally, once I get into the 4 C’s of lending, I’m going to break down really what the banks look like and how they look at you, what their perspective is, and really how you can start to not only understand their perspective, but adopt their philosophy into your own financial situation as well. I’m going to get into the lending transaction just from a high-level perspective. So that way, you know, everybody that’s involved and what all is going into, uh, an application, even as simple as an application for a credit card. So up to this point in week six, I, I broke down lenders that would be for essentially guaranteed approval accounts.

So those transactions aren’t as intuitive as the lending transactions that you’ll be doing moving forward, because those are more so, Hey, look, we’re just doing this to establish the account and really trick the algorithm or not even trick the algorithm. I don’t want to use that word. We’re really using this to maximize the algorithm based off what it says. However, when we start getting into other financial transactions with what I will call starter credit and building credit outside of those accounts, we need to get the lending transaction. Then I’m going to break down an automated underwriting. So again, this is a big one. So even though we fill out our applications, it’s going through nine times at attendant underwriting, automating automated underwriting system as well. So just like our cover before at the Bureau level E blue Bureau level E Oscar in a previous week.

So that way you understood that your actual challenges weren’t going to a human, it was going to an automated system. You also need to understand, especially where we are with technology, that your application isn’t going to an actual physical person, the majority of the time is going to assist them. So I’m going to break this down as well and help you understand that. So how to maximize this week, um, once you complete this module, there’s going to be a set of action steps for you to complete. So literally once you complete this, you go through the video, you go through everything, you get the feel for this module. Um, I have some action steps that I need you to complete, but I have a couple of questions for you before you get to those action steps. So the first question is, have you completed weeks 1 through 7?

And essentially if you are watching this particular training, if you’re in week 8 and you’re watching this and you have, I have not completed weeks 1 through 7, you are doing yourself a disservice because you’re not going to be able to maximize any of the concepts, benefits or action steps that are covered in this week. So the very first thing you need to ask yourself is have I completed weeks 1 through 7, not have I viewed the videos, but have you not only viewed the videos, but viewed the videos attended. It’s not necessarily if you attend the live Q and A’s, it’s not necessary if you attend the Facebook group or going to the Facebook group, if you, those, those things are there for additional support. Really what I’m saying is, is have you completed the actual action steps associated with every week? Okay. If you have not done that and your trying to speed ahead, or you want, you watch the videos and you are getting to this place where you just want to understand what what’s in week 8.

Then I suggest you stop and you go back and you complete the action steps. Even in week 7, you complete all of the action steps in week 7, even in week 6, you establish all the accounts. And that’s what I mean by completed, actually completed. And you did the work. Um, I broke down something really, really important that I’m going to reference in this week, I believe in week six. So just know that you need to complete weeks one through seven. The other thing is, is that you can’t have any negative items reporting on your credit file. So if you’re watching this particular training and you’re trying to complete week 8, and you have negative items reporting on your credit file, i.e. anything that we’ve covered previously, that’s causing your glass to be dirty. Week 8 is not going to be appropriate for you.

You’re not going to be able to get any results. And if you do get results, the results are going to be stifled because you have still items that are reporting negativity on your credit report. So in weeks 4 and weeks 5, we spoke about how to create the challenge letters and how to send a challenge letters. The previous weeks before that, we built the foundation on identifying everything that’s negative on our credit file. So we need to continue to address and get those negative items removed. So, although this is an eight week program, you will spend the majority of your time for week 5 and week 7, because those are weeks that if you’re, if you have a significant amount of negative items on your credit report, that you are going to be really, really addressing until you get those things removed and or do the principles that we covered in week 6, in week 5, I mean, week 5, additionally, even in week 7 you are.

Now, if you complete all the items in week 7, you now know how important it is to have a cashflow program. And a lot of the principles that I cover in week seven, especially as it relates to cashflow are going to be very, very applicable to you here in week eight. So what does this mean? This means you may be completing week 8 prematurely. No, you are. If you haven’t done all the things that I’ve broken down in the first 7 weeks of this program. All right. Uh, the other thing is, is that, do you have the holy grail credit mix again? That is a foundational piece. Remember we want to clean our glass, put ice in our glass, then start to seek the water. So when week 8, I’m really breaking down how to go out and start getting some of the water. So if you don’t have the holy grail credit mix that I showed you how to complete in week six, then you need to complete the holy grail credit mix.

Because again, that’s what we’re doing to maximize all of our points available. So again, remember I broke down the most effective way to get a 700 credit score is following all the principles that we’ve already covered. That’s the 35%, that’s the 30%. That is the new credit. Well, actually the credit mix. So again, do you have that? The other thing is, do you know your DTI ratio, your IQ, your debt to income ratio? Again, this is something that we covered in week 6. We need to know what our debt to income ratio is. So that way we can understand how much particular water we can qualify for. So again, that’s something that you need to know going into this week, and then the last thing, and I’ve already spoken about it at the first bullet point, but I’m going to re speak about it. Do you have a cash flow control system?

Not, did you watch the training? Not did you peruse the checklist? Not did you just maybe kind of, I look at a couple of the things and say, nah, I’m not going to do that right now. No. Do you have a cash flow control system in place implemented, practicing it, completed all the things. Okay. If you have not done that, then you need to stop and go complete this. Okay. Now this is the tough love Kenny coming at you. All right, now, I’m on your. If you try to go do anything else in this week and you don’t get the results I’m telling you right now, coach Kenny is telling you not to do it. So you need to get all these outcomes knocked out. So that way, once you have these things complete, then you can really, really be effective with week 8.

Okay? So I’m off my, um, I’m off my soap box. We’re not even on the soap box. I’m just kind of prepping you because I want you to be successful, but these are, this is how you’re gonna maximize your results in week 8. And again, you can be completing week 8, three months from now, when, when you started, you can be coming back to complete week 8 in the future, because you just want to make sure you maximize week eight again, week eight is one of those things that you’re going to prep yourself. So what, so that way you can be lendable okay. And then understand this information. Now let’s go ahead and hop right in. So, Oh, well, uh, I, I’m not off my rate yet. Okay. I’m not off my meat. You know, holding you accountable is your current utilization, less than 7% reporting.

That’s another key thing. All right. So in order for you to have, and really maximize this, we want to make sure our utilization is low. So I showed you exactly how to get utilization down inside of the cash flow control system. And I showed you how to do it with really just establishing the information that we do in week 6 with the holy grail credit mix. So again, this is a another key thing. And if your utilization is at a place where it’s more than 7% reporting, then we need to get that utilization paid down. So if you already established a holy grail credit mix and utilization is still more than 7%, then this means you need to apply the principles that I taught you inside of the cash flow control system. And if you’re employed specifically increasing and maximizing your income, all right, so that’s maximizing your results in week 8.

So let’s go ahead and hop right in. So how do the banks think? Well, this is a really, really good question. So what you have to understand at the basic premise, like even how America is, and I’m going to get into a whole history lesson about the federal reserve bank and how that even came into, came into way fractional reserve banking, the IRS, how they kind of come into play and really how the federal reserve bank is it federal. It’s actual private financial institution that loans money to the government and the government is now had the ability to either loan that money and then a federal reserve bank loans, money to actual financial institutions. Why am I saying all of this? And why is this important? Well, it’s important because you need to understand that America is founded on credit and it is founded on debt.

It is founded on cashflow. So because of that, I put down the majority, but all of banks, all of banks are debt buyers. So this means that when a bank loans money to you, they are able to do it a couple of different ways. So, number one, it’s really important that you have a financial financial relationship with a lending institution. And even if you don’t have like a checking or deposit relationship with them, that’s totally fine. Really? What I want you to understand is that what the big banks do, like the huge banks do, really every bank, what they do is they go and they apply at the fed. So if you, so they do, they make loans in two ways, they’re going to either make loans based off the deposits that they have, or they’re going to make loans based off their ability to get money from the federal reserve bank.

And really they’re just getting money from the federal reserve bank. And then they’re transferring that money. And they’re forming a loan agreement with you as the borrower. And they’re basically buying the debt that you’re getting from them, and they’re buying that debt. So that way they can get some type of return. So you need to get the fact that all banks are doing is they’re looking to buy debt, but not just buy any old debt. They want to buy good debt because making smart loans is how the banks make money, right? That’s how they make money. They don’t make money. If they loan well the majority of banks don’t make money. If they do predatory lending, which is why that’s a whole another Avenue. That’s not even associated with the federal reserve bank. And it’s kind of shunned upon as well. But banks typically make actually not typically, they make most of their money by making smart loans.

Now they do make money on fees and all these other kinds of things as well. But the majority of their money is made from loaning money and making smart loans. Because again, they’re getting their money in certain scenarios from the federal reserve bank. And then they’re also creating loans from the deposits that they have on file from their actual people who bank with them. So the banks number one rule is don’t lose money, right? That is that’s. They don’t want to lose money. So this is, this is the three things you need to get here. Number one, I’m buying a debt. Number two, I’ve got to make smart loans because again, in some scenarios, I’m lending money from the deposit relationship that I have with my current people who have checking accounts with us. And we’re loaning money that we receive from the fed that we have to pay an interest rate on it, some scenarios as well.

So we’ve, we’re getting money from the fed, we’re paying them. And then we’re turning right back around and charging you that same exact interest rate that they’re paying us, that we’re charging them, plus an interest rate that you have to pay to cover our expenses as well. Okay. So we don’t want to lose this money. Then the other thing you’ve got an industry, you, you, you really are really, they want you to really, really understand is that the interest that you pay as the borrower is literally the return they make on their money. So the interest rate all banks because they’re buying debt. That’s why certain banks are actually all banks, not really certain banks, especially if we started getting into the different types of transactions and lending. You’ll notice that certain banks maybe more privy to offer specific types of credit cards, um, that have higher limits, but they may not be the best with auto loans.

And then there’s other banks that are really good with auto loans because that’s their niche, but they may not be good with home loans. And then there’s banks that may, Hey, look, we only want to exclusively focus on personal loans and not necessarily, I’m not saying that we won’t offer those additional products, but what you’ll find is that certain banks offer more incentives based off that specific niche that they have identified in the marketplace because they have identified number one, the type of borrower that they’re looking for. And then number two, that interest rate is literally a compound thing that they’re making. So you gotta look at it. You gotta look at it from the bank’s perspective. Hey, if I’m loaning money, because I, because I want to follow these principles. If I’m loaning money to this person needs to be a smart investment, and I’ve got to, I’ve got to make a return on my investment.

So now instead of the bank, looking at you as a borrower, they’re literally looking at you as an investment. So, Hey, look, I’m going to get my principal plus interest back because interest is well, his interest is how we make wealthy. I mean, this interest is how we build wealth and then compound interest on a monthly basis. How we keep the lights on. The other thing is, and this goes without saying, because we spoken about this up to this point, but the better your track record, i.e. Credit is the more likely they are willing to give you money. Right? And I forgot the gift, but I think you understand the more likely they are willing to give you money and they deem you as a safe investment. So that’s really how it goes about, because think about it. If you’re loaning your money out to someone you don’t know, and they already have a proven track record of not being able to pay back money from your friends, why would you loan that friend money? You probably won’t. So because banks can’t really have like a, a, like a one-on-one relationship, so to speak with you, like you would with your friends, what they do is they use lots of different principles and characteristics that will cover, and also stuff that we’ve already covered to make smart lending decisions. So that way they can ensure that they get a return on their investment, right? So this is how the banks think. Now let’s go into more detail about this. Now there’s different types of lending of financial institutions. Um, there’s three main ones.

The first one is just a traditional bank. So this is like your Chase, your Wells Fargo, your, um, BBAT your MT bank, US bank. Typically, these are your traditional banks. Like they’re just like an actual bank. It could be a state bank, a local bank, but it’s a bank. And the whole purpose of it being a bank is it’s a financial institution that, that, that this is the distinction right here. That’s run under federal and also state laws and regulations. And then traditional banks make loans, cash checks accept deposits, and they do this with the intent of making a profit for a shareholder slash investor. So the key thing with the majority banks is either they’re going to have public shareholders or private shareholders and their ability to make smart loans and accept good deposits at a profit is their main concern.

That’s why typically you’ll notice that in some scenarios, if that bank isn’t niched in that, that particular phase of lending, it’s not yet saying that a bank won’t offer credit cards, auto loans, home loans, personal loans. But what you’ll find is that certain banks may be more competitive in that specific space based off their geographical or whatever their specific capabilities are. That gives them a leg up to be able to be competitive at the end of the day, they’re their loyalty. I’m not going to, I don’t want to sound cold here. The loyalty isn’t necessarily to you as a consumer, of course, they want you to, they want to loan you the money because the banks had they’re flush with cash. They want to loan you the money. But really what they want to do is make sure that when they do loan you, the money that their investors and shareholders are going to get a return and they can make good on their promises to them.

Plus the actual notes that they borrowed to loan you the money. So that’s why I said that they’re debt buyers. So that’s your traditional bank, again, nothing wrong with a traditional bank. Um, again, some traditional banks could be better than others for certain reasons, especially when it comes to cashing in deposits. So the more moral of the story is, is that that’s one of the financial institutions that you can get money from. The second one is a credit union. Now here’s a distinct difference between a credit union and a traditional bank. A credit union is a federally regulated financial institution that has controlled it, owned by the people who use it services, i.e. the credit union members. So typically, you share something in common with, if you, so if you join a credit union, typically you may share something in common with the group such as the location, employment, et cetera.

So that’s the reason why credit unions, you know, overall have lower interest rates and better incentives then traditional banks, because it’s typically not in all scenarios, but it’s typically owned by the people who use it, i.e. it’s members. So members are like, Hey, look, we still got to keep the lights on. We still got to make sure we turn a profit and be able to be able to stay afloat. But our main incentive isn’t necessarily to make profit because of the interest rates and the fees that we’re charging. We’re really trying to look out for the people who are part of our credit union. So again goes back to the same thing as the banks credit unions offer historically, and typically credit union interest rates generally lower than banks, but again, it goes back. So a one credit union may be really good at auto loans, and there may be another one that’s really good at all three, or that just only offers a certain type of thing.

So again, that is your traditional credit union. So, um, you need to understand how this works. And then again, the type of institution that you already, maybe you already may be with, you may already have a relationship with a credit union, or, and, or you may have a relationship with a traditional bank doesn’t mean either was wrong or right. It just means that you need to understand that the, the intent of that particular financial institution, the third one is a thrift. And these aren’t as common. Uh, these kind of these, these, uh, are also federally, federally regulated savings banks and savings, federally savings, banks and savings loan associations, similar to the bank, but its main focus and its main services making home loans. So that’s why you’ll see that there’s a lot of, most of what these thrift type of companies they’re really just focused on getting home loans.

So unless you’re at a place where you’re looking to get a home loan, you may or may not see many of these, but a good example of this. Let me see if I can give a good example, really have an example, right? Just those, those VA loan companies or, or companies that really just give mortgages. This is an example of a, of a thrift institution. Now, some of them, um, one just popped up in my head, something called Flagstar Bank. So although they are a bank, their main focus is making home loans. Okay? So you may not see as many of the traditional banking relationships because their whole focus is making loans. But you need to understand that these are the type of financial institutions as you go out. And then again, like I’ve already alluded to certain financial institutions are better than others, especially when it comes to the lending transactions in which you’re seeking.

Now, that is a type of financial institutions. Let’s go ahead and keep on moving forward and talk about the 4 C’s of lending. Now this is what just about every bank or financial institution or any person lending you money is going to look into. And if you start to loan people money professionally, this is what you should be considering as well. Now the first thing is capacity. Now this goes back to you as a borrower, do you have enough income to make monthly payments them as a lender? They’re looking at your capacity. You remember we covered DTI, right? So that’s why it’s so important to understand what your debt to income ratio is and your ability to pay back whether or not you believe you can do it or not. Okay. So that’s the first thing. This is a big key thing. The next thing is capital and capital really has to do with, do you have a cash for a down payment cash reserves or investment assets?

So if you are trying to get from a bank specifically, let’s say for a home and I’ll cover more of this in the home, home buying section of, of a week 10. But if you’re trying to get money from the bank, sometimes depending upon your credit score and the amount of loan they’re gonna, they’re gonna want you to come to the table with some money, right? And or if you’re just looking at a traditional credit card or a personal loan or whatever the case is, they may look at your cash reserves and they may look at your investment assets, right? They want to know, do you have skin in the game? Do you have any type of capital? Are you currently managing your financial resources responsibly? Or are you in the wreck? Right. So if you’re in a red and you don’t have any capital, not saying they won’t loan to you, but again, that’s something that they want to look, look at.

And that’s something that not even wouldn’t look at it, that’s something that they do look at that they ask you about, especially when it comes to home loans, business loans, working capital loans, all that kind of stuff. Not as much for credit cards, um, in lines of credit, but they will look at that. The other thing is credit. Obviously it goes without saying, we have spent an insurmountable amount of time on credit and why it’s so important. But basically when it looks to credit, I don’t need to go into credit at this point because you get it. You’ve understood it. You understand the algorithm, what they’re asking and what they’re looking for is have you shown financial responsibility with your current impasse obligations? i.e. Are you paying your bills on time? i.e. Are you maximizing your utilization? i.e. Do you have the holy grail credit mix?

i.e. Do you have a lot of inquiries? Are you looking thirsty for credit or do you not have a lot of inquiries? i.e. Do you have that essentially history? Right. So credit is a huge, huge thing. Um, when the banks look into arguably probably willing to that in capacity have a lot to do with, if they are going to loan you money and some scenarios, if you don’t have much capital, but you have the capacity, i.e. The cashflow and you have the credit, then they’ll feel comfortable with lending you money. Because again, the banks are in money or business to make money off of the money that they loan you. Then the last thing is collateral. Okay. So typically it’s the property you’re financing, but essentially it’s the bank safety net. If you default on the loan. So if you’re getting a car or a home loan, those are like typically like the two biggest loans that people get the collateral is the actual piece of property itself.

That’s why banks are saying, Hey, look, if we loan you this money and you default, we’re going to foreclose on a home and attempt to get our money back, that we loaned you. So we have some type of asset, but because we make smart loans or we make smart lending decisions, so to speak, um, borrowing decisions, we want to make sure that the money that we’re loaning you is going to be able to be paid back. So, um, especially now after 2008, with the whole financial crash, that happened there really, really on collateral at this point. Um, and again for the car, okay, if you choose not to pay us the monthly installment payments that we made, I mean, if you choose not to meet your monthly installment payments for the amount of money that we loan you, we are going to take the car back.

We’re going to repossess it, repossess it. And then if you don’t get your car repossessed, then we’re going to charge it off as bad debt. And probably attempt not in some, not in every scenario, but probably try to create a judgment on you and still try to get the money back that way by suing you okay. So we covered that obviously, you know, in a previous week, but again, collateral. So these are the 4 C’s of lending. And you want to look at when you’re going into any type of transaction, do you have these 4 CS? Because the bank is going to look at these 4 C’s, um, especially the first, um, capacity and credit. Um, but depending upon the lending transaction, do you have the collateral? So I’m not saying that it’s easier to get a home and auto loan. Um, it’s probably the easiest loan to get is that there’s an auto loan because they have the collateral.

But again, you don’t want to go into that type of lending, transaction and not have strong for the other, other three strong, because you might have a not, you will have a higher interest rate unnecessarily. Okay. But these are the 4 C’s. Now, the lending transaction, okay. Who all is involved in this? Well, you yourself, you’re involved in the lending transaction because now you’re at a place. Okay, well now I’m going to go out and get money from the banks. So these are the things that you have control over. Number one, your cash flow, and your cashflow is going to dictate the amount of cash reserves that you have. Your cash flow is going to dictate your DTI ratio. Your cashflow is going to dictate. If you’re paying your bills on time, maximizing your revolving credit, your cash flow is arguably more important. Once you’ve approved your credit, then your credit score.

Because once you have a strong cash flow program, you ensure that your credit score is going to be able to maintain a reflection of that because all your credit score is, is a reflection of your financial behavior and your financial behavior has a lot to do with not even a lot has to do with your cashflow. So in the lending transaction, we’re looking at your cash flow. You should be looking at your cashflow, you know how to do this, looking at your credit score you know how do this, doing your research, which is something we’re going to cover in terms of doing my research for that particular loan or that particular, uh, loan or credit card. So I need to do my research and I need to know and understand what my DTI is, especially for those larger transactions. And in some scenarios, it’s probably better for you to, when you’re doing your research and doing your DTI to figure out, is there a way that I can lower that?

What can I do to maximize this goes back to cashflow. So that’s the first part that you need to understand. You are very, very important with the lending transaction, probably the most important thing in the lending transaction. And I’m giving you this perspective. So you can know that everything else outside of the lending transaction, isn’t going to work in your favor. If you aren’t good. Now, the next thing obviously that’s involved in the lending transaction is the credit bureaus. So that’s Equifax, TransUnion and Experian. So we understand exactly how to, you know, how to control those or make or maximize those, but they are involved, um, because of the credit side of the 4 C’s in a lending transaction. Then the other thing that’s involved in the lending transaction is obviously the bank. They have to give you the money. So who, who is involved at the bank?

Well, typically you have the banker and or loan officer in which you are applying for that loan or credit. So typically for certain types of loans or revolving lines of credit, you may or may not deal with the banker. Um, but the bank or loan officer, especially for lending transactions is going to be involved. So when I say loan officer, you may not deal with the bank or, or the loan officer. It may be an automated thing. You just dealing strictly with the bank. Uh, the next thing is the underwriter. Okay. All right. The underwriter is always going to be involved to a great degree, whether it’s automated or whether it is an actual person, that underwriting is going to be looking at all the criteria that we covered to ensure that they make smart loans, especially if it’s an underwriter, that’s responsible for making sure that they sign off on that particular loan.

Because again, they don’t want to lose their job because of, they may smart loans because of the main, I mean, many bad loans, cause now they can put themselves out of business. Then the next thing is loan servicing department. Once you’ve already established your relationship with that lending institution, that’s going to be involved. And then they’re going to the loan service department’s going to communicate with the credit bureaus and the new credit bureaus are to communicate with your credit score. And all of this is going to be addictive. I mean, um, uh, uh, indicative, that’s the word I’m looking for of your cashflow, right? That’s that’s why, that’s why I started with you. So this is the lending transaction in a simplified yet expanded way that helps you understand that you are the catalyst to ensure that every lending transaction goes in your favor.

Once you start with yourself, okay? Now, now you understand that let’s get into under automated underwriting. So because of all the lending transactions and where we are right now, underwriting automated underwriting systems are designed to dramatically speed up the lending process by assessing key information you provide at the time of application. So that’s why you need to understand even before you can be losing before you even get to the time of application because of this automated algorithm that that particular bank has. So that’s why I said in a previous module, it’s not even a previous module, the previous slide. That’s why it’s so important to do all the things that I’ve covered, but also at the same time, understand by doing your research, what that automated underwriting or what that bank typically looks for. Okay. Then we have, the banks are going to be using the 4 C’s, um, because this is the tool that they use to assess you as a borrower, not to mention, they’re going to look at that tool with the underwriting automating systems, going to look at your employment or your employment or employments.

If you have more than one, they’re gonna look at your income. They’re gonna look at your assets, your liabilities, your credit history, obviously your debt ratios and the collateral securing the loan because they want to ensure they get their money back. So again, if you go through this process, that’s why you can go and apply for stuff online. And you get an instant declined because they, they just assessed everything that you apply. And you’re like, no, rather than that, we’re not going to get our money back. Uh, who’s the next person, right? So that’s why you need to understand that there’s an automated thing. Now, many lending transactions fall on the underwriter though, the actual underwriting to make decisions. So it’s important that you demonstrate your ability to be a low risk. Don’t give them a reason to say no. So even if let’s just say in some scenarios that you apply for a credit card and you don’t get approved, well, the automated underwriting system may have temporarily decline you.

So in some scenarios, especially like with the credit cards, you can go and you can, you can reach out to you know, the, uh, re-decision line or, or the, uh, I believe it’s called re-decision line or the, um, reconsider relation reconsideration line, excuse me. And you can reach out to them and speak directly to an underwriter and give them the case as to why you feel like you are a smart lending transaction. And maybe the underwriting, the automated system kind of didn’t give you the best plan of attack or the best review. Right? So, but, but when you get to that point, what I’m communicating is, that the underwriter is the most important part of this particular lending transaction. So when I’m saying hello, don’t give them a reason why, that’s why we want to make sure our personal identifiers are taken care of.

That’s why we want to make sure that we have our, you know, this is our utilization down. That’s why I want to make sure we have all of those negative accounts removed from our Credit Bureau. That’s why we want to know our debt to income ratio. That’s why we wouldn’t understand that. Hey, look, if we have inquiries that we’ve gotten those things removed. So if you’re, if you have a strong employment, so if you’re speaking directly to an underwriter, you can say, Hey, you know, I understand that the automated system, decline me, but Hey, look, my DTI is XYZ. My utilization is that X, Y, Z. I haven’t missed a payment in the last 24 months. I have no negative items on my credit report. And then you can start to speak their language because again, your credit score is irrelevant at this point.

What they’re looking, what they’re looking at is not only the content of your credit report, they’re looking at all the other things that make up this particular lending transaction. Because again, they have to make smart lending decisions because that’s how they make money. All right? So that’s automated underwriting. So this, this essentially wraps up this particular module, thinking like the banks. So at this point, you understand how they think, and now you get how you need to position yourself as a lending or as a borrower to start getting money. But the other thing I’m going to leave you with, and I’m going to cover this, not necessarily in this the 700 Credit Score Academy, but I’m going to drop the jewel that you want to start putting yourself in position to become a bank or invest your money like a bank. So again, how can I get money from the banks and do the same exact thing they do and make money on my money.

So obviously we’re not going to cover that. I just want to give you the perspective that, Hey, look, banks have been around. Insurance companies have been around for years. They make lots of money. Um, they build generational wealth because of this prudent approach. And now you can also say, Hey, look, how can I start to invest and operate like a bank versus obviously I still want to get my money from the bank, but how can I also make sure I’m doing the same exact thing they’re doing for their customers? Okay. With that being said, I will see you in the next module.