What You Need to Know to Effectively Improve Your Credit Score

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Why Your Efforts to Improve Your Credit Score Aren’t Working and What to Do About It

Your credit score is one of the key factors that lenders look at when you apply for a mortgage loan or any other type of credit. If you are someone with a credit score below 600 you have probably had lenders deny you and your attempts at credit repair have been unsuccessful.

If you have issues with your credit you will not be able to qualify for a mortgage or get credit cards, and you might even be refused a bank account if you owe on any previous accounts. Many people struggle with maintaining a good credit score. That is because it fluctuates and you might barely qualify for a loan one month and suddenly be denied because your score dropped below the minimum requirement.

What can you do about this? How can you raise your credit score so you stop having these issues? The first thing you have to know in order to successfully do credit repair yourself is to know what is on your credit report. The first thing you need to do is take a look at your credit report and see what the lenders see when they pull your credit. Are there old inquiries, delinquent accounts, or charge-offs that may be causing lenders to see you as a credit risk?

If you dispute anything, make sure it is an error. Disputing items on your credit report will not always make them go away. You could dispute something that was close to expiring and now you have just made it “active” again and restarted the clock ticking.

Things that affect your credit score include:

  • Charge-offs
  • Collections
  • Foreclosures
  • Repossessions
  • Late or missed payments

Start building credit. Your score won’t improve just because you let it sit for 7 years. The only way a lender can get an accurate view of your ability to pay bills is if you are actually paying bills. They want to see how long you’ve had these accounts and your payment history.

So now that you know what affects your credit score and that you need to build credit to improve your score, and this is how you do it:

  1. Self Lender is a great program to use if you are not able to qualify for any type of loan. In this program, you open a CD (certificate of deposit) for the minimum amount which is $500 and you can opt to pay $25 per month for 2 years. At the end of those 2 years, you’ll get that $500 plus any interest that was paid into it. Plus, it shows on your credit report as an installment loan which helps you build up your credit.
  2. The second thing that you want to do is to get a credit builder card. It is a secured card that helps you build credit because you have to make a deposit ($200) and then use it responsibly like you would any other type of credit card…make on-time payments, stay below your limit, and don’t use it for cash withdrawals.
  1. Apply for a $1,500 line of credit through Hutton Chase. It is a guaranteed approval and you won’t be turned down. This company is similar to Fingerhut if you have ever gone through them. Just like Fingerhut you purchase products from their online store. You have to be 18 years of age, have a valid credit or debit card (checking account), and be able to pay $25 a month. Standard requirements and you have two options, you can pay $210 or start with as little as $60.

So, you can begin to improve your credit score for less than $300 out-of-pocket. The Self Lender and credit builder card reports to the credit bureau within the first 30 days so you will be on your way to a higher credit score which will help a lot when it comes to applying for FHA loans for the first time home buyer program. You will have a much better chance of qualifying if you have some positive credit history to show a prospective lender.

If you need help with fixing your credit check out http://www.paytoncreditservices.com/learn-more. We specialize in helping credit challenged individuals become mortgage ready.


Fastest Way to Pay Off Your Home Loan

Be yourself; Everyone else is already taken.

— Oscar Wilde.

There has been a lot of talk going around lately about bi-weekly mortgage payments and how they can help you pay down your mortgage faster. Maybe you heard somewhere that making a payment every two weeks instead of once a month — can help you pay off your loan sooner. This is true, but did you know it has more benefits than just that one?

What are Bi-weekly Mortgage Payments?

When you buy a home from a mortgage lender, you will have monthly payments that are due on a certain date of each month. This is set by default unless you ask for more options. If you split your 12 monthly payments in half you will have 26 payments instead of 12, and half of 26 is 13 so you end up with one extra payment per year. If you apply that to the principle of your loan you can reduce the term of your loan by as much as 5 years.

Does Making Payments Every Two Weeks Help?

When you look at it like this it sure does. Just one extra payment per year can lower your balance. What if you made 2 extra payments per year? That would drop it even lower. Adding just one additional payment could change your mortgage terms from 30 years to 25 years. That really is a big help. And besides that, here are a few more good reasons to use this strategy:

● Pay off the balance faster

● Pay less in interest over time

● Build equity faster

● Easy to deduct from the budget

How Do Bi-weekly payments work?

The strategy itself is simple. You just make one additional payment per year. This can be done a couple of different ways. You can opt for making bi-weekly payments vs a monthly payment if you are just starting your loan process. Many lenders have this option, you may need to call around when doing your research.

Another way is to divide your mortgage payment by 12 months and save that amount per month and submit that amount once per year towards the principle. You can also use your tax return if you want to use it for that. But make sure that your lender applies the payment to the principle. Because if they don’t then that money will just go towards the interest and you won’t get any of the benefits mentioned here.

Don’t Just Send in Extra Payments

In order for this strategy to work, it must be done properly. Some people make the mistake of thinking that they can just divide their monthly payment in half and send it in twice or send additional money on top of their regular monthly payment. I have heard stories of people doing this and then they don’t understand why their balance isn’t coming down. You have to set this up with your lender to do it this way, and they need to understand that the extra payment goes to the principle. Otherwise, all you’re doing is paying the interest and that isn’t going to help you.

What Does This Payment Strategy Work For?

You can use this payment strategy with your mortgage payments if your lender agrees. This works for any home buyer programs, it doesn’t only apply to FHA home loans. A lot of finance companies, banks, and credit unions will allow you to do this for your car payments as well. Always just ask your lender if they participate in bi-weekly mortgage payments, or choose that option if it is offered at the beginning.

Do Inquiries Affect Your Credit Score?

For those with a low credit score qualifying for a loan can be nearly impossible. You need to have a good understanding of your credit report and how inquiries affect your Fico score when it comes to homebuying or purchasing a vehicle. Here is an overview of inquiries and how much effect they have on your credit score.


Don’t Waste Your Time Disputing Inquiries

The only time you should dispute an inquiry is when it is unauthorized or outdated. A credit inquiry is the documentation of someone looking at your credit history to qualify you for a credit account. Now, this might take a few points off your score but it will not hurt you that much. Hard inquiries only affect your score for a short amount of time and soft inquiries don’t usually affect you at all.

Examples of a Hard Inquiry:

  • Credit card applications
  • Auto loan applications
  • Mortgage applications
  • Apartment rental applications
  • Student loan applications
  • Personal loan applications

A soft inquiry is when you check your own credit report for mistakes or when your employer performs a background check. Utility companies will sometimes check your credit to wave a deposit for new service. They will ask your permission to run the check and will tell you if it will be a hard or soft pull.

Inquiries Don’t’ Affect Your Credit as Much as You Think

You might be surprised to find out that inquiries aren’t as damaging to your credit score as you think. Everyone is worried about inquiries and how to get rid of them but the truth is that you have to authorize a lender to check your credit and if it is valid then it won’t be removed. You can only dispute hard inquiries that occurred without your permission.

You are advised to check your credit periodically to spot inaccuracies or instances of unauthorized activity that could indicate identity theft. If you dispute errors in your credit report, the credit bureau is required to investigate the matter and correct any errors.


You’re Allowed a Shopping Period

When it comes to homebuying, you may have to go through several lenders before you find one that will approve you. Does this hurt your credit score? Yes, but only the first one counts. You are allowed a shopping period when it comes to finding a car or mortgage loan. As long as the inquiries are all within a 30-day period they count as “1” inquiry. What hurts you more is applying for several credit cards within a short period of time because it looks as though you’re short on cash and makes you look bad to credit lenders.

Here is why inquiries aren’t that bad.  Hard inquiries only stay on your credit report for 2 years. They only affect you for a short time and then after that have no effect at all.

Creditworthiness plays a big role in your financial stability. Before applying for any type of loan, take the time to build up your credit. A higher credit score will improve your chances of being approved for a loan with the best possible terms and rates.

If you struggle with improving your credit score, check out www.shannonpayton.com/instagram to see what program will work for you!

Should I consolidate my debt

Out of all the techniques to make your money go further, I think one that seems to be getting the most attention is debt consolidation, but is it the best way to go about it, and if so, how does it work?

Debt Consolidation is a simple concept; you find a company that will help you combine some of your credit card debt into one bigger loan. This allows you only to have one payment, and the interest rate is usually lower. If it’s not a lower interest rate, you are only paying the interest on one loan instead of several smaller credit cards or debts. 

Here are some things to consider when approaching Debt consolidation:

1. As with all types of financial arrangements make sure you carefully read all the fine 

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Print of any contract you are signing. Never, ever sign based on what you were told. Make sure that the actual written agreement spells out the exact terms of your new payment, interest rate, due date, and the loan term. If you aren’t sure of something, ask for clarification, and if the contract is overly long and complicated, don’t hesitate to run it by an attorney first. Legalshield is a great provider for these services. I know this may sound like overkill, but you don’t want to make things worse by signing a contract with a company that isn’t honest and ethical. 

2. Always check with the Better Business Bureau to see if any complaints have been filed with the company you are considering for your loan consolidation. This is a valuable resource if you are not competing for the consolidation with your local bank. Although, online testimonials and referrals from friends are great too, checking with the BBB can give you an even broader idea of how well the company has been doing and how honest they are in their dealings with their customers. 

Overall you want to make sure that you know exactly what, if any, impact that this consolidation will have on your financial picture. In my experience, most consolidations average at a five-year term. They do not prevent you from running up your debt again. Yes, this method will help with paying off debts, but it will create another more massive bill. And it may not provide the big credit boost you may seek. It is a balancing act that you need to carefully consider before you make this decision. 

Debt consolidating to save money is an excellent option for many people, and it may be the best course of action for your specific goals. Just remember that if you have excessive late pays or are delinquent, you may have a higher rate and could be denied. 

Until Next Time


What to do if you think you have a lemon

I know this is going to sound horrible, but no one cares that you purchased a lemon. Why does no one care? I’m happy you asked. No one cares because you have options when you go to the car lot.

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They include but are not limited to:

-Purchasing a car warranty

-Researching and planning for your car purchase

-Checking the title


For the most part, most reputable car dealerships will offer one with the car. If not, you can negotiate a car warranty as they are an add on similar to GAP insurance. If a vehicle is too old, you will not be able to get a warranty. It works like financing an old car. Typically banks who finance older cars are subprime lenders or banks that deal with subprime credit (scores below fair). That means excessive fees, payments, and interest rates.

The truth is that most people who trade in their car have done so because they don’t want to pay for the repairs. If you are buying used, you may be buying another person’s issue. Yes, car dealerships will repair problems on the car, but they also know what they are willing to pay for you to play. If the vehicle can not be fixed to their standard, they will sell it in the auction to a company that exclusively deals with subprime credit.

A new car buyer can also research their future car purchase to prevent impulse buying. Most car lots offer carfax reports. I am not saying carfax reports are a guarantee that 

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The car will be a worthy purchase, but it is a tool that will help. My cousin suggests finding the same car at three different places and picking the best of the three. In that scenario, price, condition, and features should be heavily weighed to select a winner.

If you believe you have purchased a lemon, contact your state’s Attorney General’s office, issue a complaint with the Better Business Bureau, and the Bureau of Consumer Financial Protection. Turning it in the finance company still, make it a repossession whether you voluntarily did so or not. 

Until next time…

Ways to avoid impulse shopping during the holiday

When you’re young, you have the world at your feet. You’re single with no kids and no responsibilities. This is about the time you get introduced to credit cards and how they can change your life. If you’re a college student, you have probably walked past the guy or girl sitting at a table in the common areas, passing out applications for a credit card. They may even offer you something in exchange for filling it out. While credit can be a great benefit to you, you can get into debt quickly if you don’t manage it responsibly.

Free food is usually the hook for college students because banks know that kids in college are always hungry and always broke. They bait you with a coupon for a free meal in exchange for filling out the application. Building credit is great, but it can also cost a lot in interest payments. As an adult consumer, one of the things you must get a handle on is impulse shopping to avoid credit card debt.

I speak from the position of someone who has been there. I went through something similar after graduation. I had just graduated from college, and I was having a great time. I soon realized, though, that impulse shopping was taking over my life. I was spending money as fast as I could make it. And I was one of those that fell for the free food trap offered by the credit card company.

Rather than continuing down the path to debt, I developed a system to get a handle on my spending habits. I would decide if the item was something I needed, and if it was something I could afford, and if it could be purchased with the money (cash) I had with me. This system has worked really well for me, and I advise the clients who come to me for credit counseling to do the same.

In order to break that habit, you need to ask yourself some questions to determine if it is an impulse buy or something you need and would have bought anyway.

The 3 Step Process

Here is a breakdown of how this system works. When I see something I really want, like clothes, shoes, a new phone, a manicure or pedicure, I ask myself these questions. Take the time to answer each question. If the answer is yes, then go to the next question on the list. Any time the answer is no, stop right there and move on without purchasing.

Are all my bills and expenses paid? (rent, electric, water, tuition?) 

Can I pay cash for the item? (Do I have enough with me?)

Will I still want this item if I wait until tomorrow?

If the answer to any of these questions is no, then this is not really something you need right now. As badly as you may want it, you really don’t need it, so realistically it can wait for a time when you have more money or after your other expenses are paid. If you still want the item after waiting two weeks, then, by all means, buy it.

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Additional Tips:

● Plan out your purchases

● Keep a list of the things you need

● Only buy what is on your list when shopping

● Make yourself wait two weeks to a month for impulse buys

We get caught up sometimes by thinking, “Oh, it’s so cute, and it’s only X dollars.” But that $5 or $10 adds up quickly and can put you over your budget. Impulse buying is made easier with the availability of credit cards. It is just so easy to pull out the card and defer the payment until later. And here is the kicker: student loans and credit card spending account for the highest percentage of debt in 18 to 24 yr old adults, according to this breakdown on debt-by-age on CNBC.ve

What I tell my credit counseling clients is that “you didn’t get into debt from impulse shopping overnight, and the problem isn’t going to be solved overnight.” Don’t give yourself a hard time over a weak moment at the “biggest shoe sale” ever in the history of shoe sales. Just decide that from now on you will try to be more responsible with spending and make better choices.

If you learned something from this post, please share it with your friends and family on your social media pages. Let me know if you have any questions or comments to share your thoughts or experience in this area. I would love to read your responses.

Until Next time

Is it financial child abuse?

I had seen so many client cases where parents had abused their children’s credit before they even had a fighting chance. The parents went and purchased items in their minor children’s names or have had young adult children cosign for purchases after neglecting their credit. How fair is that? It’s not. Now I feel that we need to have a balance with debt and #debtfreedom. Yes, I know that is an oxymoron, but most families are not going to be able to save to purchase a house unless they started at a young age. Most adults are not taught financial literacy in high school or at home, so the experience is the teacher. Are you catching where I am going with this? 

I think this sucks okay! But it made me sit and evaluate my parenting skills when it came to personal finance. Are my children financially ready and prepared to leave the nest? Will they be boomerang kids? Are we prepared for college? I was about to go down the rabbit hole. STOP! Let’s make the changes today. 

 I have decided my goal is to make sure at least 100 individuals are as financial confident as possible. Meaning, let us start to have the conversations that make us feel uncomfortable about #personalfinance. How are we supposed to know how to fix these issues of we can’t identify them?

Goal setting

Children are little life-sized mirrors of their parents, so we have to reflect on the best parts that we can. That doesn’t mean we are perfect, but we can be perfected in areas of our lives. So let’s talk! What can we do to help reduce the effects of personal finance and parenting? 

I know this may be hard but if you , check out our budgeting ebook to help you gain control of your finances or our Do it yourself credit repair workbook!

Until next time 


PS. Be sure to check out my YouTube video going into detail about my approach to parenting and credit

Is it a good idea to pay extra on my car?

I get this question a lot. Short answer is yes if you can afford it. I encourage paid debts, I really do. But there is a proper way to do it.

I recently spoke with a client, who was concerned because her car loan was not reflecting the extra payments she made. As I listened to her story, I thought, this happens all too often?

When you choose to pay an extra payment towards a loan, be sure that the amount is notated to go towards the principal. The principal is the amount you borrowed. The interest jacks up the money the lender receives in exchange for lending you the money.

Most lenders will apply the notated payment to principle as long as you are current on the note. For instance if your car payment is $400 and you pay $500 then note that $400 is for the payment due and $100 is for principal.

In the case with the client above, the lender made them through pay western union, which didn’t give the option to apply the payment to the principal. Nor did they provide any other payment option. Talk about shady lending practices .

What is subprime lending, you ask? The short version is the type of lending option you have when your credit score is below 620. If you are in this range, you have about 68 million other people with you, according to this FOX news article. Lousy credit costs much money. 

How do you overcome the attack of the never decreasing car loan? It’s simple. If you have horrible credit, work on increasing your score with a secured credit card, such as a Credit builder card, or open a Self lender . When used responsibly, these account types can put you in a position to refinance your vehicle with a better interest rate. In the event you were scammed off the top and purchased a car that is too old to refinance, do all you can to pay down the principal. Even if it means you have to call the bank and make sure the payment is applied correctly.

Until next time,


Who is Shannon?

Such an easily complicated answer.

I’m a wife, mother of three busy boys, sister, Auntie, friend to a few and an educator to many.

Why have I chosen to educate people?

  • Because it helps people avoid mistakes I have made
  • Because everyone has a gift and this is mine
  • Because your success is my success

Flat out. You see I’m an honest person who is a sharer. Back in 2011 we were being evicted with a young family. We didn’t have anywhere to go and found ourselves in pickle. Within a year, we were able to purchase a home. In all seriousness we were evicted in August 2011 and purchased our home in July 2012. No cosignor, no gifts from family. Just faith in God and some know how. Fast forward 8 years later, we are still homeowners, have zero car payments and a vision to help more individuals become financially confident.

I want to say thank you. I have been wanting to blog for a while, but just lacked the discipline to do so. That’s another one of those honest moments. Although I am a new blogger, I have had success with

  • Educating clients to purchase a home within 1 year of an eviction
  • Taught clients how to save $100-600 within 30 days to become better budget-er…having control over your money is sexy.
  • Coached clients to achieve student loan debt forgiveness of $130K within 3 months

You can expect to find general education of what you can do to help you achieve these types of successes. Those individuals didn’t have some special blessing, they just worked the process.

As a licensed realtor and credit counselor, I want to help and be your one stop for all things credit and housing. Do me a favor and share the things you find valuable with friends and family and let’s get this train rolling.

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