5. The Installment Credit Blueprint

Hello, and welcome to the Installment Credit Blueprint. So we are at the end of this week, and I am just going to take you one home and walk you through the types of installment credit that we want to have to complete our holy grail credit mix. So we have covered quite a bit of ground this week, and here’s what we’re going to cover in this module. So I’m going to break down and help you just do a really quick installment account audit. Very similar to the audit we did with our revolving accounts. Then we’re going to break down how to maximize these accounts and bring it on home with the three guaranteed installment accounts that I would suggest that you start with assuming do need some additional accounts after your audit. So let’s go ahead and talk about the audit. So you already have the sheet from the previous module, so that’s going to be a really, really beneficial sheet for you to use.

And at the end, I’ll show you how to use that tab. So that way you can be clear, but really what we want to do is I’m going to ask you this question. Do you have any of the following accounts already? Because if you already these accounts, we want to leverage these. So do you already have an auto loan, a home loan, student or personal loans? So if you already have those, if you already have one auto loan or one student loan, we want to identify, do we have any of these accounts? Okay. Because the goal is to make sure that we have at least one of these installment loans reporting on our file. Then the question is, do you have at least three active reporting installment accounts and consider multiple student loans as one account? So if you have let’s just say five student loans, we’re just going to include all five student loans as one account.

Because typically what happens with your student loans is you have a student loan, but it will be broken up into several different student loans, but it’s really, it can be really just be viewed as one. So if you have multiple student loans, don’t necessarily include that. Really what we’re looking for, and then the other thing too, is that that can be deferred or forbearance. So if we have student loans, we still want to put ourselves in position to where we have some other additional reporting accounts on our file. And once you have identified these accounts, then the question is, is did you set this up for autodraft payments yet? Again, you remember the 35% payment history. We do not want to allow any missed payment history whatsoever, right? So this is a fairly quick audit, but the moral of the story is, you need to have at least three installment accounts reporting.

So if you happen to be watching this particular module and you already have an auto, a home loan, I mean an auto loan, a student loan and a personal loan, and then you’re good to go. You don’t necessarily need to do anything else. If you happen to be watching this module and you have, let’s say a student loan and a personal loan, then you just need one additional account. Then you can just get one of the accounts I’m going to recommend. If you happen to be watching this training and you only have one of the three, then I’m going to give you two options to get the, three options I should say, to get the additional accounts. So the first option before we hop in is, to reiterate how we maximize, so we only need three of these installment loans reporting on our credit file.

And remember, the purpose of these accounts is to show installment account reporting. We want to have three active. We don’t want to miss any payments, I think you get that, but again, we don’t want to miss any payments. One missed payment can literally drop our score 60-70 points unnecessarily because we chose not to make sure our payments is on time, which goes back to the very thing I was saying about, make sure you set this up on auto draft. So the first account is Self Lender. You may have already heard of them. If you already have one then perfect, but let me break down how this works. So how Self going to work is you can build credit while you save. So it’s really powerful. So they give you the opportunity to set up a savings account, and then they put in installment line of credit on your file,

and then you just pay over a period of time. So you can start with as little as $25 per month. There’s no application fee. My suggestion is going with the 12-month option, just so you can get that reporting, and then you can get all of your money back in 12-24 months. So if you choose to do the 24-month option, you can do that, and at the end of that period, you will get all of your money back minus whatever their processing fee is. So when I first did this, I just did 150 bucks a month. And at the end, I think I got a check for like $1,740 or 50 bucks or something like that. So one $150 times 12 is $1800. So their fee was, it wasn’t that, it wasn’t that much. And I just put the money back in my savings account.

So this is a really strong option for you to do, and this is going to show whatever your monthly amount is, so let’s just say I’m starting with a hundred bucks a month, well, it’s going to automatically show that you have a loan out for 12 times 100, if you’re doing the 12-month option, and it’s going to say, hey, look, we are, we are loaning Kenney, $1,200. And then as you make your monthly payments, it’s going to reduce that balance every single month until the balance reports zero. And then at the end, it’s going to show that you paid off $1,200, but you really just saved your money the entire time. So I really, really, really, really, really cool way to build credit and save money at the same time. The next one is Credit Strong. It’s very, very similar.

And just like Self Lender allows you to build credit while you save. You can start with as little as $15 with this particular option. And unlike Self Lender, loans can vary between 12 months, which is one year all the way up to 120 months, which is 10 years. So you really have a little bit more flexibility with this option. And the amounts that you can say are larger than what you could save with Self Lender. So the maximum you can go up to is about $150 with Self Lender, and that’s only up to that two year period, but with them, they’re saying, hey, look, if you want to save for 10 years, you can. Now I don’t suggest you do that entire 10-year timeframe. My suggestion is do that 12-24 months option again here. Because again, we are doing this just so we can get that holy grail credit mix.

And this is just a foundational piece to getting the content looking good and the reporting history and the credit mix, 412 points that you want to set at this point on our credit report. So we can really set ourselves up for success. So that’s why I’m saying, hey, look, you want to do that 12 to 24-month option, even though you can go up to 120 months. So my suggestion would be either the $89 monthly option for 12 months. That way at the end of 12 months, you got a thousand bucks saved or the $48/month option for 24 months. And again, I believe that’s the same exact thousand dollars that you’d have saved at the end of that period. And then you’ll receive all of your money back at the end of the term minus their processing fee. So this is a really, really good way to save money.

So if you want to be a little bit more aggressive and say, hey, look, I want to, I want to set a savings goal of $5,000, you know, a year or whatever, or a couple of years, then this is a solid option. If you’re at a place where you have kids and you know, you want to start saving for some portion of their college or car in the next couple of years, this is a really solid option. So let’s just say, I know I don’t want to go back on what I’m saying, but if your child is five years old and you want to save up, let’s just say money for them to have for a car when they turn 16, 17, 18 years old, then this could be an option that you save over time and then just use that money.

So again, this is really, really powerful, and it’s another option that’s going to take whatever you pay monthly and or not even pay, whatever you save monthly, it’s going to times that by the number of months that you’re paying and then put that as an installment line of credit on your file, and then every single month that you make your payment is going to reduce that balance and do that reporting history. And by the way, this one and Self Lender reports to all three bureaus. So this is a very, very solid option. The next option is Rent Reporters, and this is our third and final option that you can use to establish installment credit. And what this is going to do is report any on-time rent payments, which is really cool. So generally speaking, you haven’t been, or you haven’t really had the opportunity to report rent payments, but they’re going to give you the ability to do it.

So there is a setup fee. It’s $94.95 to set that up, and then it’s just $9.95 cents per month to continue to have them report monthly, which isn’t a bad thing because you’re going to get that reporting to your credit bureaus. And what they’re going to do is report 24 months of rental history, which is really, really powerful. And also what you need to understand about them is they’re only going to report to Equifax and TransUnion, but it’s not a big deal. We’re just looking to get that piece of installment credit on our file, right? So this is another solid option. If you look into get that installment line of credit on your file and if you’re already paying rent, why wouldn’t you do this? Like, this is a really solid option to do. It’s just going to report that balance for you monthly.

Now, what you’ll notice is on the other, I’m going to go ahead and pull it up. So on this tab here, so we had the payment tracking history for our revolving credit. So obviously, and hopefully you’ve established all of this already then with our installment credit, I want to break down how this works. So really, what you do is let’s just say you have an auto loan for $25,000. You can just put down the amount of the loan that you already have. Let’s just say it’s $25,000. So that way, you know, that you have $25,000 and let’s just say you do either, let’s just say you do the Self Lender option for 50 bucks a month and you can do both. You can do Self Lender and Credit Strong. So if you do the $50 per month option, that would mean that you would do, that’d be an installment loan.

You do the $50/month option for 12 months, that’s $600. And let’s just say, you choose to do the $48/month option for 24 months. So that’d be $1000. So that means you have total, you would have total installment credit reporting there, of $1600 plus the auto loan. Now your rent is going to vary. So I really can’t give you a number in terms of what the rent is going to do. It just really depends on what your monthly rent is, but that payment history would show up on your file. And that’s really what you’re looking to do is have that payment history. So you just have to just, once you get your application knocked out with Rent Reporters you’ll know what that number is. And then the monthly amount would just be right here.

So if I’m doing the $50/month, I’m just going to do $50 here, and then I would just do $48 here from doing that one. So that’s a total of $98 coming out, plus the $9.95 for the Rent Reporters. So that’s $107 and not to mention whatever your auto loan payment is assuming you have a $25,000 auto loan, or if you have a home loan, student loan, personal loan. So you just include that right there. So that way, you know exactly what your monthly payment is. And again, I want to reiterate, set all of this up on auto-draft. So if you’re feeling really aggressive and you’re saying, hey, look, I want to save a little bit more money, then, you know, obviously my suggestion would be is just play around with these numbers and just see what is going to be doable for you on a monthly basis.

So that way you know, without a fail, you will not miss this money because the last thing, the last thing you want to do, and I’ve seen this happen is you established these accounts and you missed a payment, they’re going to say, hey, look, we reported this accurately. Because it’s not our fault that you missed a payment on our credit rebuilding product, and they’re not as lenient for taking away those late payments. So you want to make sure that whatever amount that you commit to, you can take care of and you will not miss the money. $50/month is is not a big deal to miss, but if you’re like, hey, look, I want to do $100/month. Then all it’s going to do is just increase the amount that they’re going to report on your file.

So $100/month with Self would be $1,200 that they’ll put on there. And then it’d be $100/month, but essentially you get the idea here, play around with this so that way you know what your monthly outlay is and make sure this is set up on auto draft. And congratulations, once you establish these accounts, you now have the holy grail credit mix. All right. So congratulations! Make sure if you have not started establishing the accounts in this week, you get those accounts established, and I will see you in the next week where we’re going to be breaking down how to maximize your cash flow and make sure that you maintain perfect credit with all the accounts that we’ve established.