Episode 11: Transcription
Kristina Modares
Hey, y'all, I just wanted to jump on here really quick to tell you that we will be doing a little giveaway, I just wanted to give you some of the details so you have the opportunity to enter. So if you've been enjoying our podast and you submit a written review on Apple Podcasts, or actually whever you listen, you will be entered to win a $250 gift, Visa gift card and some Open House swag. I think like there's a hat and stickers and a pen. So you can message us a screenshot of your review on Instagram. Or you can email it to podcast@openhouseaustin.co. So we're still a new baby podcast. So more written reviews will actually help us expand our message to more people much faster, and hopefully help them get into their own homes and save money sooner. So we will end this giveaway on Friday, August 28 at 8pm Central time, so just make sure to send us your screenshots before then. Okaya back to the show.
Steph Douglass
Welcome to the open house podcast for women talk real estate. I'm Steph Douglass.
Kristina Modares
And I'm Kristina Modares.
Steph Douglass
How's it going?
Kristina Modares
It's good.
Kristina Modares
Just slow Monday, but me my sister actually kind of not been telling anyone because I didn't want to. I wanted to know if it was like gonna go through or not, but we made an offer and finally got under contract on a house in Florida. So I'm very excited about that.
Steph Douglass
Yeah, I'm excited about that too. Just like retreats. Yeah, seriously, Open House retreats. It's so exciting. So vacation home, just like run us down the details really, really fast.
Kristina Modares
Um yeah. So me and my sister grew up, kind of going to that area. It's in the panhandle of Florida. So we wanted a place where we could go together and like take friends and family. And she's kind of like, you know, her job is lets her work remotely. So we kind of were like, Oh, you could move down there for a little bit and just like we could fix up a house. So we found a home that's like a seven minute walk to the beach. It definitely is a weird kind of funky home, but it's it's two units. So the top floor is a three bedroom, two bath house. And then the bottom is an efficiency. So we could rent out both sides. And even like when we come to visit, we could potentially still be making money while we're vacationing. So I am very excited. I know that I think we both have this plan Steph of like we want to be able to not live in Austin for like two months out of the year. So I am kind of excited where this could be an option where we could just like go over there and kind of live/work for a month or so.
Steph Douglass
It's so exciting. So cool. So your vacation home house hacking.
Kristina Modares
Yeah, oh my gosh. Yeah, definitely.
Steph Douglass
I so exciting. I'm excited. Yeah and really fast. How much How much do you have to put down on a vacation home
Kristina Modares
um we have you have to put 10% down so but we are actually going to be able to put down less because my sister's actually going to live there for a little bit so we get to put down 5% so we're putting 5% down and then we're using the rest of the money to renovate it because it it does need some work. But it has land so eventually we could add a pool and add like a little other structure if we wanted to.
Steph Douglass
Oh my gosh. Yeah.And that part of Florida is so beautiful.
Kristina Modares
It's, I love it so much. It is It's gorgeous. It has like crystal clear water and really pretty sand and I am very excited. I Oh, we also know the area pretty well which is good because I'm not very into, like just buying in areas that I'm, that I don't know too much about. So we know this area. We've been going there since we were like, seven years old, so we know it pretty well. And we're not this is actually something I haven't really done. We're not going to see the home before we buy it. I don't,so...
Steph Douglass
Yeah, so you're not gonna go during option or anything?
Kristina Modares
No, no, our option here is right now. And I think our inspection will be Friday. So we'll see if we're actually going to move forward with it. It looks like it's going to be okay. But we will see.
Steph Douglass
Yes, it's actually it's exciting to like be able to keep tabs on that. Well, we'll keep everybody apprised. Yes.
Kristina Modares
How was your weekend?
Steph Douglass
Oh, yeah. My weekend? It was really nice. I relaxed, which is I mean, last week was really busy because I was I was gone for the week before that. So just to like, catch up on everything. And we've been working a lot.
Kristina Modares
Yeah, it's been busy. It's been a lot of like building things like writing things and building things. Like for our course. So I think that's been challenging.
Steph Douglass
Yes. Like thinking through things and then thinking through them again and thinking that we have it down and then it's not right. And it's it's a good process. But it's also like brain draining.
Kristina Modares
Makes you second guess herself a little too.
Steph Douglass
Yes. Oh, yeah, this I mean that, I guess it's the it's just the process of building a business in general. It's like, one time one day you're like, this is incredible. And I still like we never doubt ourselves that we have like such an incredible offering. But just the way we put it together. You're like, Okay, well, we're failures.
Kristina Modares
How do we speak to this audience in the best way possible?
Steph Douglass
Yeah. So so much more going into that and I'm really excited. I think, like when you when we come out on the other side, it will be perfect.
Kristina Modares
It'll be something that's never existed. I think before.
Steph Douglass
Yes. Yeah. No, that's exciting. Yeah.
Kristina Modares
So what are we talking about? You want to walk us through that a little bit.
Steph Douglass
So I just went through a big credit restoration. And I think I said that and Kristina thought that I went through a company because I keep calling it credit restoration. But really I just did it on my own. So we're we're really going to talk through credit score and what it has to do with mortgages and then also how to raise yours.
Kristina Modares
Yes. And I'm excited to see what exactly you did. Maybe we start with like, do you mind sharing what, what was your credit score? And where did you want it to? Where did you want it to go? And why?
Steph Douglass
So I did a renovation in 2018 and didn't think about the ramifications on my credit by using zero percent interest credit cards. So I love the idea of like a zero percent interest credit card being a tool with which you do a renovation because it's free money, and then as long as you have a plan to pay it back, then you're good. However, I had a plan to pay it back to like cash out refinance to just pay it all back. And then I couldn't cash out refinance, because my credit score was too low. So I had to rebuild. So I started, I think my, my lowest credit score was like 642. So which isn't, it's not that bad. It wasn't like, you know, I wasn't in it below below 600, which is good, but it's still not optimal to get a loan. And then even for I went through like home equity line of credit, you have to have a 680 to get a home equity line of credit, you have to have a 680 to get a conventional loan. And so for the cash out refinance, it was just like, not optimal. And so I talked to my lender, and I was like, Listen, this is what I need to do. And I wanted to get this cash out refinance to pay all this debt back and they were like, Oh, you have to pay this debt before you can get a mortgage. So Catch 22 Yes, it was a catch 22 so I instead like decided to put off my cash out refinance and just like hustle and like not, not get a cash or not do a cash out refinance, but just like pay it back with with cash. So I had to, uh, went from 642. And then my lender was like, Okay, here's all your, your credit cards. I think I had four. And my credit usage was really high, which is the problem your percent credit usage is a base are out of that. It's so hard. Yeah, it's like, like, if you're at you know, I think I was like 80% credit usage, which is really high, the optimal is below 30%. So it's kind of crazy though with your credit score, because they still want you to carry some debt, but they don't want you to carry too much. So you have to be in like that sweet spot.
Kristina Modares
That's really good to know. Because I think me and my sister strategy for this beach house actually is we're going to We were going to open a credit card, but now I'm like, Okay, I need to think maybe I should open more than one credit card. And then, like, I have the cash, but I just want to get the point. So I'm like, I want to spend, like, you know, we'll probably spend 20 K or whatever on a credit card for the renovations. But then I have to watch that to make sure I do pay it off. And what is the usage? Because I didn't even think about that. How long did you keep that debt? Like or how I mean, have the balance.
Steph Douglass
So the, the zero percent part of it, like lasted different amounts of times on each one. So like, there was 18 months, there was 24 months, which is kind of cool. I mean, luckily, I didn't have to pay any interest, which is awesome. Like, I wasn't sitting here that's, that's why I was like so not
Kristina Modares
it's tricky, though. It is when you'relike oh, I don't it's fine.
Steph Douglass
Yes, exactly. So. So traditionally, like the way that I've ever paid down debt is I always pay the highest interest first. So Anything with that with you know, I just go in order highest interest and then when I knock that out I go to the next highest interest but for this one zero percent I was like oh no problem. So when my lender was like, okay, you have to do these things before you can even refinance. I was like, Okay, here's exactly what I have to pay down from each credit card. They gave me this sheet It was called a rapid rescore. And they said, okay, you have your USAA, you have your Capital One, you have your Citibank. And then I had, I think I had two others, actually, that they were like, you don't have to pay those, you're fine. But there was no rhyme or reason. It was just like, here's what you need to pay. Like, I would never have known this before. And they were like, you don't even have to pay all of them completely. You'd have to pay this one down to this, this amount, this one down to this amount and this one down to this amount, and then your credit score will be above a 700. I was like, Oh my gosh, what a roadmap. But in this process, I learned a lot about why my credit score went down so much and it wasn't just the amount of debt I had, like I said, the usage. So on these credit cards, I had to be really strategic and request a credit limit increase.
Kristina Modares
Wow, I'm gonna write that down.
Steph Douglass
Yes. Because the credit limit increase if you have more credit than your credit usage goes down, even if your debt doesn't go down.
Kristina Modares
Hmm, I need to know all my credit cards.
Steph Douglass
Yes, I think just on the regular people should be requesting credit increases. There's some credit cards that won't ding your credit for it too. So you have to be careful, they should warn you like, Hey, we're going to check your credit for them.
Kristina Modares
Ohh, that's a good question as to like, well, like will this affect my credit score?
Steph Douglass
Because some of them do, and some of them don't. So it's just kind of random. And for credit increases, you have to put how much you earn. And like they don't check that. So you just like put in, you know, whatever you're earning right now, but there is no way for them to like income verify. So it's not like a huge process. It's just and then that's it. Kind of a catch 22 also because they, they want you to have a good credit score to increase your credit limit, but but now now that I've increased all my credit limits, I have like $100,000 worth of credit.
Kristina Modares
Wow.
Steph Douglass
Which I should never use. And like it's, I mean, if you're a person that gets really tempted by that, then like, maybe don't do this, but hopefully you're, you know, an adult and you and you like, are able to have this because that really looks good on your credit if you have a with a huge credit limit. And then when you do have your like, you know, monthly credit card that you pay off every month, that percent usage doesn't go too high. You're still even if you put like $5,000 on your credit card. You're still at, you know, point 5% Yeah, your credit.
Kristina Modares
I feel like I'm learning a lot as well because I wasn't my I I grew up with my dad who I really didn't teach me about credit cards, he just like he never told me that you could spend money that you didn't have. Like, I didn't know that, like he, he always taught me like to pay off the bill and like, but with that, like, that's great advice. But then also, I didn't learn what all that meant, like, I didn't know how to be strategic with it. And I just was like, Oh, yeah, you don't like I didn't know that was an option. So I think it's good to know what the option is out there. Like Yeah, you can do that. But also, yeah, you don't want to spend money you don't have but there are some ways to be strategic with it. But then there's all these different caveats of like, make sure the balance you know, yeah, what was it what you say and make sure to Oh yeah, request a credit limit increase because that can affect you and there's just so many things to pay attention to and I am not the best like I'm going through my budget right now. I am not the best at doing a personal budget because I've always just been good at like spent just kind of spending Not overspending, but I'm like, I need to know where my money is going. So I think I was only seeing that on mint. You know, that application, like, this is your credit score, and it would always just show it to me. And I was like, Oh, that's I think that's fine. Yeah. But when it goes down, I'm like, I don't know what that means. Yeah,
Steph Douglass
Yeah, yeah, because there's now so many ways to track your credit score, like all your credit cards have built in credit score checkers, and like I use Credit Karma. I also use the free Experian app, which is just like a like has every there's three different credit bureaus, which also just adds to the confusion of this. And it's the average of all three that is like actually your credit score for people for purchases and stuff like that. So I like to check it on all three different ones. So Credit Karma gives me my Oh, I should have had this. Two of them and then Experian the third one. So I just like to keep keep tabs on on where it is. And while I was doing this credit, like kind of intense credit rehab, I was checking my credit score like every day. So So the other thing is, when you pay your credit card down, it doesn't hit the credit bureaus for a while. So I mean, their statement has to come out, and then you know, it's still you have it's gonna take a while. So like that you pay your card down, and then you check your credit score the next day, it doesn't show up then.
Kristina Modares
Oh, yeah. So what was your timeline? So when did you start this process? And when did you see the increase?
Steph Douglass
I started it in January. And then I saw I now I'm at 750. So I raised my credit score about 100 points. And that so it took about six months.
Kristina Modares
Okay, well, that's doable. Yeah. Especially people who are that's usually people's timeline. When we talk to them about buying a house. They're like, you know, six months to a year so yes, what a great time to talk to a lender and figure out what you need to do is if you do need to increase your, your score.
Steph Douglass
So good, I mean, amazing. And then that so my biggest thing I don't I don't have any late payments. But that is a huge part of your credit score. So one late payment can like, you know, take take years to recover from. So, yes, yeah, right. It just like it's ridiculous. And so Oh, actually, that's a lie. I have one late payment. It was on a Bank of America. Something like credit card where I had $1 that I owed, and I didn't pay it because I didn't think about it. And then I called them like I was in this in this rehab. I was like, Okay, I'm getting all this stuff off my credit score. They refuse to take it off. It was so lame, but there are you can just dispute claims on your credit. And so that is really worthwhile, even if they, you know, sometimes they don't, but a lot of times they just don't want to deal with it until they're like Yes, fine disputed.
Kristina Modares
Now I want to look at my credit score because I am pretty sure like I over my lifetime I have definitely had like four late payments and they've all been like when I go I should learn my lesson but when I go close out a bank account and then they are like, oh you still have a balance and like why would I close it out? Why wouldn't you just like tell me that so I wouldn't even be affected It's so annoying this happened with also with at&t recently I like closed on my account and then I got like this call from a creditor which
Steph Douglass
Oh, I was there.
Kristina Modares
Yes, they hire their own like credit creditor company to like scare people into paying bills. And I was like What is happening? But I've had like four of those things. Even, this was the worst. I had a late mortgage payment which is like the biggest. Yeah, really affected my credit. And it's annoying because like I always have the money. I don't I need to get more organized with like, where my money is going and what money is being taken out of what account. But I think there was just a moment where it tried to pull my mortgage payment out of my account. And there was like, not enough money at that time in the account in that specific account. And then they never told me like, I never get any notification. The only time I got notification was my app Mint actually told me like I got on there after like not being on there for a month and it was like, you haven't paid your mortgage bill. And I was like, wait, what, what, but my credit score is 749. And I've had all these different things happen to me. So like there's still a way to bring it up.
Steph Douglass
There's hope. So we talked about the credit usage, so that's percent usage, and then we talked about late payments. And then another really annoying part or factor in your credit is age of credit. And so I was the same my mom never had credit cards. She never, like, encouraged me to get a credit card, which is, I mean, it's it's smart, like you said, but also frustrating.
Kristina Modares
Well, my dad didn't tell me about credit cards, but he used them. And he also, like, opened one up for me, like when I was like 15. And so he would like get he is, I mean, maybe I shouldn't say this because I don't know if that's technically allowed, but he like established a credit for me. But like, didn't, maybe he tried to educate me on it, but like, he just was like, I'm gonna do this thing for you right now. So he understood why credit was important, but he didn't want me to ever spend money I didn't have because I was a child. I would I would have done it probably.
Steph Douglass
I mean, totally. I that's really cool that he did that because the age of credit. The fact that you had something you had something open when you're 15 probably helps your credit score so much when my first credit card was, you know, not that long ago, probably when I was like 23 So maybe 22 maybe in college but really really minimal credit and and so that really hurts you because they're they're wanting to see a really long history of you being a good borrower.
Kristina Modares
Oh, so that also really it is shown some ways. Oh, what's that?
Steph Douglass
Oh, sorry that was my watch. Oh my gosh. A scary Yeah, so it's it's so stupid. We haven't talked yet about how credit is a tool of oppression and it absolutely is it's like but knowing all these things kind of helps you to overcome that and and so share this with everybody because it's I mean share what you know about credit with people who might not know about it because it really is important for like any life purchase. Yeah, but we just don't get we don't get taught about it.
Kristina Modares
It can mess up your entire world like it's so I think we were I was talking to one of our friends who she was like trying to buy a car and they were like your credit score is 0.
Steph Douglass
Oh, yeah.
Kristina Modares
Like, how is that possible? And she's like, I don't know. I just didn't wasn't like using credit and I didn't. I don't know. So but it's just kind of annoying that like, people look at your credit score when you rent when you buy when you are trying to buy a house or a car or whatever. And it was like this annoying number that like defines you. Yeah, absolutely. It's like a smoke and mirrors episode when they did you ever see that episode when they like, gave you a number? Like you could know. Okay,
Steph Douglass
Oh Black Mirror?
Kristina Modares
Yeah, yeah. Black Mirror. And they had like the contacts Yes. And you would wear them and you would look at people and they would have like a score and you just like judge them and I was like this is credit score.
Steph Douglass
You get like, like them in real life. Yeah, every interaction i think i think about that all the time. And how like that close we are actually living in that. Yeah. But But yeah, so age of credit is important. So like anything college aged children that you know anyone just like encourage them to responsibly open a credit card. And because it really does matter, I have my two sisters in college and both of them have a credit card, just trying to like educate them on things that I know that they're not learning in college, which is ridiculous,
Kristina Modares
Like treat your credit card, like a debit card and maybe turn on your auto payment every month. And then that'll like Come quickly when you spend $3,000. And that immediately comes out of your bank account and you're like, oh, okay, I can't go on a shopping spree. Because that's like real money.
Steph Douglass
Yeah, I also really like to have a credit card where I keep my other money, like I have my bank account at USA and I also have a USA credit card. So I like to use that USA a credit card because it shows up every time I check my bank account. I'm like, Oh shit, I need to pay that. But whereas if I do Capital One who've spent money on my Capital One credit card, that's kind of like out of sight out of mind. So I'm not as like inclined. To be stressed by that number, and after like visit that website specifically to pay my credit card.
Kristina Modares
Yes, I love that. I think what I want to well what I'm starting to do too is since I've never really had a budget I'm I downloaded this app. You need a budget so why nav? Yeah, YNAB? Yeah. And so I think me and my friend are going to meet every month and go through everything and like organize all the transactions because it links your your credit card links to your bank so you can see where your money's going. And I think it's like you assign every dollar a job, which I'm trying to get used to I don't know. It's it sounds I like that technique. I just I've not done that before. In a very like structured way. So I think like if you can start some sort of accountability where you're looking every month through your statements and like categorizing them, you're going to see really quickly where you're spending your money.
Steph Douglass
Oh yeah. I love that. I think that's like so, so important, I should probably get more, more in depth, I kind of look at it more of a macro level. But I like that, especially when you're starting to get like passive income and you're like, Oh, you don't want to get too used to having more money and spend, just like increase your spending with what you earn.
Kristina Modares
And that's what I've been doing. I've just been like, I'm fine. Like, I don't really know how much money I've been saving every month because I've just been so in my mind, I'm like this, haven't made it a priority. So I just know that it's important. If I do really want to save money to like invest more or just for savings or even to like, this was my friend was saying, she's like, I want to see where my money what, where my money is going and what I have because I don't want to feel guilty if I do want to buy things like I want to buy a new shirt. Like I don't want to feel that guilt. I want to know like, Oh, I already set aside money to do that. So I can do it.
Steph Douglass
I love that. I think that's so important. I also the feelings and emotions that come along with money are like Really strong, like, among the strongest, there's shame, there's guilt, there's, you know, it's rough. And then also the relative the relativity when it comes to, like when you when we're 31, 30 and increasing our income every year. And so like, I just thinking about this because I bought new running shoes. And, like, in my 20s I didn't buy things like I never bought stuff. And so like $130 pair of shoes was like a huge decision. Like I sat on it forever. And I probably like, hurt my feet because I didn't buy shoes for so long. And I just bought $130 running shoes without even thinking like, Oh, yeah, like, of course, like it was just a norm so relatively like that. $130 means something different to me than it did before.
Kristina Modares
For sure. And that's why I want to label where my money goes. Because I do feel like a guilt when I spend money and like sometimes I don't, but it is weird. It's like When I, like Eric will see that like will go in a store like Home Depot. And I'm like, Oh, we need things for our backyard. And then I like pick up all the stuff things and then I, I'm just like, No, no, no, I don't need it, I don't need it. Like I have this guilt about what, which I don't want to be a huge consumer, but I also am like, I don't want to have these like, really bad feelings towards spending money and I definitely have that and I don't want that anymore. So knowing where you're spending money and knowing your credit score and what's going on, I think that like really helps. Yeah,
Steph Douglass
Absolutely. Just being aware of your numbers, being aware of your credit score, especially, but like that, and then really, we got on this kind of tangent of spending because debt is such a big part of the credit score system. And so if your money is going somewhere where it's kind of unnecessary, when you should kind of be going towards paying your debt down. I mean, just imagine for a second, like maybe close your eyes unless you're driving like being completely debt free, other than mortgages but like no debt at all. And it's your interest like a happier person. lighter and yes. And you've been like that you've you've been debt free for a while, right?
Kristina Modares
Yeah, I don't really think I've ever had debt.
Steph Douglass
So good. Yeah.
Kristina Modares
But that that's why I need to know where my money is going because I can't just have that. Like as you get older, we're gonna have more medical bills like things will come up and if I, you know, have to spend money on something to help my family or myself like, I don't want to then be in that crippling state. I want to be able to have like savings and stuff. So yeah,
Steph Douglass
One last thing on spending just because I do think it's relevant. I and this is, this is a podcast that I listened to, but it's Ramit Sethi, Ramit Sethi, which who I don't like fully believe believe in everything that he says I don't agree with him on them. He's, he also doesn't love real estate, which I just think it's because he hasn't really dabbled in it. Yeah. But he has this episode of the Tim Ferriss podcast about living a rich life. And I think it's just so cool. Like he says, spend money where in the areas that you really love and then cut back on everything that you don't like at all.
Kristina Modares
I love that I listened to that one of his episodes on Tim Ferriss. When I was like, in my I think I was like 23 and I love that because my dad was so much someone who's like don't spend money on a coffee and I you know, I took that in. I don't know, I took that to mind a lot. And when I listened that episode, I was like, Oh my gosh, yes, I feel this way because I don't think that I mean, yeah, when I was making like 25 K a year, I should probably not get any coffee. But you know, like, if you're making a good wage like and then you find enjoyment from something like getting a coffee once a week or whatever. One, three times a week, whatever. I don't think that that is something you need to like, restrict yourself on,
Steph Douglass
right so that if you find joy in that, then that's like, more power to you. It's just like we've had, just like you said, there's guilt on in every spend. I have I have this weird pain of like, should I or shouldn't I and so now so Alan and I just listened to that episode. And we kind of like defined where we love spending money. And so we don't have any guilt when when we spend in that area, but then we cut back on everything that we just like, don't love as much as that.
Kristina Modares
That's so good to listen to with your partner as well. Yeah. And I think that's actually a way Eric and I balance each other out a bit because he will spend money and I will not. And together we make a very good balance of like, well, this will be fun for us. And so I think we are at where I'm like, well, we don't need that and you already bought one of those. So I think we it's good to listen to these things with your partner. Especially if you grew up with very different ideals about money and savings.
Steph Douglass
Oh my gosh, yes. And especially if you're getting married, because once you get married you your credit score is the same.
Kristina Modares
We, I didn't, okay. Someone told me this. Actually my friend of mine told me this recently. I don't know if this is true. But she said that when you if you get married and you have a prenup, and then you get divorced, like she said that can the prenup almost like goes away if you put your finger if you put your finances together, and you have a prenup, which I was like, I want to investigate this just because that's interesting. Like, why would that make sense? But I wonder if I wonder if that's true. Anyway,
Steph Douglass
the marriage that's it that is a scary part. And I think I remember having a tenant who was like my credit scores really bad because I married someone whose credit score was really bad. And I was like, Ah, no, that was the first point and I was like, Oh, this is real, like credit score is so personal and so and not not that I'm against marriage at all, but Just be careful, but I am. I know we can get into on a different episode.
Kristina Modares
I'm not against it, but I am.
Steph Douglass
And but just like be aware just like combat your partner and like make sure you're growing together in finances too, because it's such a big part. I mean, what is it like a third of your relationship is I mean, you've got like, your intimacy and all that but like finances are such a big part of your relationship or should be.
Kristina Modares
I agree. Okay, can we pull this back into credit scores? Have we won? Let's see, what do we need to talk about? Oh, we've kind of covered a lot of what we were going to talk about. Yeah. Anything else you want to share about your journey or any?
Steph Douglass
Well, I guess I'll wrap it up with saying with like the factors and I don't know that I covered all of them, but I have them up right here. So Oh, another thing is, when I was talking about age of credit, the if you're closing like if you have something that's And from really like your 15 year, when you're 15 your credit card, if you were to close that, that would negatively affect your credit score, I have something in college, I think I owed like $100 or something and I didn't ever pay it. And it's kind of a bad mark on my credit score, but if I had closed that card, then it would have negatively affected my credit score even more. So just like Be really careful and use the resources that are available to you. So Credit Karma, we're not sponsored, which maybe we should be, but Credit Karma is what I use and they have a credit score simulator. And you can go in there and it says like all the different actions you can take like what if I bought a car? What if I decreased my my credit balance? What if I increase my credit, you know, all these things you can like go in there and see what will change your credit score for what for the better or for the worse. So do that because it's kind of it can be counterintuitive, but I really recommend like even if it's not Credit Karma isn't always like to the tee accurate just because, you know, pulling credit is, you know, it's not a hard credit poll. It's just kind of soft. But it's still really good information and there's like resources on there. So I would recommend using your resources reallocating your funds. If you're spending overspending make a budget like Kristina is and then reallocate to pay your debt off so that you can get a better credit score.
Kristina Modares
Yeah, and since we're on the credit score topic, I think people might want to know this as well as like when you are shopping for homes. So when you're looking for a lender before you decide, you know, when you decide you want to buy a house and you you're like, Oh, I need to finance this house, so I need to find the lender or bank or whatever. Whenever you inquire with a lender, they typically to just see your finances, they're going to pull your credit score. And when they do that, it might ding it a little bit it might lower your your score a little bit, but just know that there's like a two week window. I think it should be
Steph Douglass
Two weeks, yeah.
Kristina Modares
Two week window where you can shop for different lenders, as as many lenders as you want. And it's only going to do one hard poll. So if you're like, Oh, it's time for me to find the lender and you talk to like three people don't be scared that that's going to do a hard pool three times.
Steph Douglass
Yeah. That's such a good thing. I think we I think we need to just reiterate that all the time, because people are really worried about that. And we've also seen wrong information going around the internet, like people don't realize that. And so just know that you're safe. It's a credit. There's a consumer protection device to make sure that you don't you're not stuck with that first lender that you talk to.
Kristina Modares
So get your best option.
Steph Douglass
Yes, yes. Very important. And, and then as far as your credit score, affecting your mortgage lending. First of all, there are limits depending on the type of loan you're getting. A lot of times you will prevent you from getting a mortgage if you're if your credit score is too low. However, if you have a higher credit score, you're going to get a better interest rate. But anything above 750, I think, is pretty similar. So if you have an eight 850 you're not going to get like a zero percent interest rate.
Kristina Modares
Yeah, like you can move on from that. Yeah, work on something else at that point.
Steph Douglass
Exactly. So So yeah, other than that, I mean, we aren't credit experts. Let's just get that out there where we're just talking about our experiences and, and there are companies that will help you with us, but I would definitely, definitely try to do it on your own. If you can, like learn a little bit more, go through your finances. Use one of those apps Credit Karma is one of them, but Experian, there are a bunch out there.
Kristina Modares
And if you need more advice on like what you want to do for your own personal finances, like if you need to talk to someone you You can work with a lender, you could say like, I want to eventually buy a house, can you help me figure out what I need to do to raise my credit score? And if you need any recommendation for lenders just, you know, hit us up, and we can try to give you some reputable people who can help you. Because some lenders might just dismiss you, but a lot of them should help you.
Steph Douglass
Yes, yes, we can have all the referrals. So please reach out to us if you need help with this. I know this. We hear that the reason we did this episode is because we hear this a lot. This is a block for people. It's like, Oh, I can't buy a house because my credit score is not good enough. But I also would like to light a fire under your ass because because like, come on. Yeah.
Kristina Modares
Yeah. What does that mean?
Steph Douglass
Yeah, if your credit score is low, then you work. I did mine in six months. Like you shouldn't be saying that for years because it's not good enough. So get help. reach out to us, do the research, spend some time, it's really easy to be comfortable and just like go about your day to day and like not invest in your future. But I really, really encourage you to take the steps. And a lot of times credit score is your first step in order to take those steps after that to like really, truly have financial freedom, schedule freedom, whatever freedoms you're searching for, because we're all searching for some kind of freedom.
Kristina Modares
For sure, we will always be on your shoulder, pointing out how to get uncomfortable and trying to smash your limiting beliefs. Yes, yes,
Steph Douglass
Absolutely. We love smashing your limiting beliefs. And again, questions please email us at podcast@openhouseaustin.co and then follow us on Instagram openhouse underscore Austin and please if you're interested in getting Getting a personalized buying plan like going through this process and getting really serious about buying a house in the next one to two years, sign up for our waitlist. We're like really transforming people's mindsets around buying houses, and then also giving them the confidence to make the right decisions in their home purchase.
Kristina Modares
Yes, yes, yes, yes.
Steph Douglass
Anything else?
Kristina Modares
No, within the day,
Steph Douglass
we'll get that credit score up and work. And just remember, Christina and I are on your shoulders all the time telling you to suck it up. And that is a limiting belief.
Kristina Modares
My friend to the actually friends, yeah, yeah. The
Steph Douglass
actors actually. You're that's a limiting belief and
Kristina Modares
you're wrong. Yeah. Okay.
Steph Douglass
Yeah. Okay. We'll talk to you next week. We love everybody and goodbye.
