How much money could you save by managing your credit like a Pro?

Ralph
00:00:00

Have you ever felt frustrated when you're seeing those high interest rates when applying for a loan? Or maybe you've been denied credit and you felt completely embarrassed?

Well, today we'll explore how managing your credit like a pro could save you thousands of dollars and give you peace of mind. We're going to dive into credit monitoring services. What they are, how they work, and whether they're worth your investment.

How much money could you save by managing your credit like a pro? That's what I'm going to answer on today's show.

Announcer
00:00:29

In a world where crushing debt keeps you trapped, where living paycheck to paycheck has become your new normal, and where the dream of retirement seems impossibly out of reach, there's hope. Join financial evangelist Ralph Estep Jr. A man who's walked through the fire of financial failure and emerged stronger on the other side.

Welcome to Ask Ralph, the show where real world experience meets biblical truth. To break the bondage of financial despair.

Get ready to take control of your money, break free from the financial stress and align your resources with God's purpose for your life. This is Ask Ralph with Ralph Estep Jr.

Ralph
00:01:10

Welcome to the Ask Ralph show, where we master your finances from a Christian perspective. I'm your host, Ralph and I am excited to share today's powerful message about credit monitoring and smart credit management.

Now if you missed yesterday's show, we talked about being locked out of the e-filing system and the secret PIN that changes everything. Make sure you check it out because it could save you hours of frustration during tax season. You'll find all our episodes at askralph.com.

Well, today's question comes from Juliana and she writes this.

"Dear Ralph, I'm writing to you with tears in my eyes. Last night, I discovered over $3,000 in unauthorized charges on my credit card while trying to purchase groceries for my family. My card was declined right there at the checkout. How humiliating. When I checked my credit score, I was devastated to see it had dropped 100 points. I feel violated, I feel scared and honestly, a bit angry at myself for not being more careful. As a mom of two young children, I've worked so hard to build good credit, and now it feels like it's all falling apart. I've heard about credit monitoring services, but with my tight budget, I don't know if they're worth the money. I pray every night for guidance, but I just feel lost. What should I do to protect myself and my family from this happening again?"

Well Juliana, first of all, thank you for your heartfelt question. I hear the emotion in your voice and that is an absolutely startling thing.
When you find out that there was $3,000 in unauthorized charges on your credit card, and if you're like most people, that's a big deal. And I know how that triggered this immediate fear and violation. And it sounds to me like what you're saying is you're careful about it, but even when you're being careful, you're still vulnerable. And listen. That embarrassment at the grocery store checkout, I've had that happen to me. And I don't know about you, but I look around and did anybody see that. And most of the time in my experience is the clerk's usually pretty good about saying, Hey, do you have another form of payment? It's happened to me there, it's happened to me at a restaurant before, and so everybody feels you. Your fear on that.

Your humiliation. And then when you checked your credit, you find that your credit score dropped a hundred points, we need to figure out what's going on there because these financial issues are affecting both your practical and your emotional aspects of your life and Juliana, so here's my promise to you.

Don't worry. I've got answers and guidance for you today. And remember, if you've got a question like Juliana, one of the best things you can do is go right to askralph.com and click on the little search icon. Chances are, I've talked about the financial topic before, and it's a great place to get some in-depth information, even if it's three o'clock in the morning.

So I encourage you, go check out askralph.com and look at our catalog of almost 700 episodes. I've got blog posts, I've got videos out there. We've got a wealth of information and if you find that I haven't answered your question already, just go to justaskralph.com and send it to me and I'll put it on the show.

Well Juliana, your situation made me think about what's a great verse to talk about today.
And this one is going to seem a little counterintuitive and it might seem a bit abrasive, but that's not my intention. So let me jump right to it. It's from 1 Timothy chapter 6, verses 10, and it tells us this. "For the love of money is a root of all kinds of evil."

Now, why did I pick that verse today?
Because it reminds us that while money itself isn't evil. Money itself is a tool. But we've got to manage it wisely and we've got to protect ourselves. And one of the best ways to do that is to protect ourselves from those who might take advantage of us through fraud or identity theft. Well, let me get right to my gratitude statement today, because today I'm grateful for the tools and wisdom that help us be better stewards of our financial resources. And Juliana, your question really is about what tools can you use to improve your credit.
So let's talk about some of those tools today, and let's start by discussing the impacts of credit.

Well, let me start by talking about the benefits of good credit. Juliana, I think you already know this, and I often share this with listeners because this is an area I've struggled with myself.
There have been times in my life when my credit was a disaster. It is not an easy process to recover from that Juliana. So I hear you and other people who are listening, I hear you so I'm going to give you some ways to make that better today. But let's start by talking about what the benefits of having good credit. The first and immediately obvious thing. It gives you lower interest rates because lenders view you as a low risk. The higher your credit score, the more low risk the lender is going to see you. Well, if they see you as a low risk, then you're going to qualify for better rates on loans.

You're going to qualify for better rates on credit cards and mortgages and car loans. And that can save you thousands of money on interest. They mentioned the mortgage interest savings. And think about it like this. When you have good credit, and the lender see you as a good risk, it lowers your payments across all the credit products. And it makes it more affordable for financing those major purchases.

So that's the first thing. Lower interest rates. Second thing. It enhances your credit card benefits because a lot of times, as your credit improves, it opens up the door to a bunch of premium reward programs. Maybe get higher cash back percentage, you get better travel rewards and miles. And for example, like I've got a platinum American express, and I don't say that to brag about it, but I've honored my credit.

I've worked very hard to restore it. And now I get a ton of benefits from that. I get lower annual fees, I get premium cards and I get exclusive, you know, what they call card holder perks. So those are all the benefits of having that good credit. That's an enhanced credit card benefits. Obviously you get improved approval odds. If your credit is good, you've got a higher likelihood of getting that loan approved in the first place. Maybe you're looking to rent a home or rent an apartment.

If your credit is good, you've got a better chance with those rental applications. It's easier to apply and get approved for credit cards. It gives you more options in financing and there's less likelihood of rejection related credit damage. See, that's the problem. A lot of people don't think about this.

I talked about this on the show all the time. It's sort of a, I call it the death credit spiral. When you start to see that you're credit are deteriorating, a lot of people run out and try to get more credit, which leads to more denials, which leads to your credit score even dropping more. So that's another thing, improved approval odds.

You also have stronger negotiating positions because you've got leverage with the lenders. For example, when I used to run the credit union. When a person would come in, a member coming in, her credit was excellent, easily hey, they could set the tone because I wanted their loan. They were a good credit risk. I was able to give them better loan terms.

I can negotiate lower fees. I could give them higher credit limits. And it gave them a better position if they were looking to refinance existing debt. If they came to me and they said, Ralph, listen, I've got this credit card with this bank. I've got this car loan with this institution. Hey, I look at their credit score.

They've got great credit. I want to grab those loans, which means they have this negotiating strength. They have this negotiating power. Another thing that good credit will bring you is reduced deposit requirements. One of the things that a lot of people don't think about. I see this a lot with first time home buyers, I'd be talking about some pitfalls of that here in a week or so. But if your credit is good, it will reduce or completely waive utility deposits.

I remember when I changed my cell phone plan, all this has probably been 25 years ago. I bet I've been with the same plan forever. I should shop around, but I have it. But anyway, when I did that, I remember they said, well, Mr. Estep, we need to pull your credit. And then he came back and said, well, you know, you've got some credit challenges, so you're going to have to put a deposit on each of the lines.

I say, wow, I wasn't expecting that. Well, people see that too with utility deposits and if, and the same thing with rental deposits. And like I mentioned, there's cell phone services. If you have to put those money down on deposits, that really ties up your cash.
So if you have good credit, you've got those reduced deposit requirements. It gives you better cashflow and you've got more availability to your fund. You don't have to lock that up with other deposit with the electric company or deposit with the water. I know there's a town a little bit south of here and they, I think the number now is like five or 600 bucks.

They make you put down a security deposit for your utilities. In my understanding is in their particular case, they don't pull your credit at all. So you're paying for it either way. So that's another really good benefit of having good credit. You get those reduced deposit requirements. It also gives you financial security.
And I think this is the big takeaway of why good credit is so important. It reduces your financial stress. You've got greater confidence in making financial decisions, it gives you more options during emergencies, and it helps you build better longterm financial planning, because you've got that flexibility.

You're not locked into a particular lender. Now the truth of the matter is if you think about it as your credit improves, your overall financial position is probably improving. You've got those emergency funds. You're building up assets and all those sorts of things. And remember this. And these benefits aren't just about saving money.
I wish that was all there was to it, but they're not. And this is why I tied so keenly into the show today. There about being a good steward of the resources God has entrusted to us.

Because here's a truth bomb. When we manage our credit wisely, we're better positioned to serve others and better fulfill our God-given purpose. Now we've talked about the good, let's talk about the bad because we've got to discuss the impacts of bad credit and Juliana, I think you understand where I'm going here. So just like you've got those lower interest rates with good credit,
you're going to get nailed with higher interest rates if your credit's a little shaky, because here's the bottom line. I've been in this position, I made these lending decisions. Lenders charge more because there's a higher level of default risk. There's a bigger chance that you're not going to pay. And bad credit borrowers pay significantly more over time for loans. And it's difficult securing those approvals. And listen, this is the honest to God truth.

I did what's called risk based lending. And let me take a minute and explain that. So the way it worked is this. You came in for a loan at my credit union when I was working there. And again, that's been over 20 years ago. I would pull your credit score. And we had tiers like A tier, B tier. So just like when you're in school or you're a little kid in school.

Yeah. The teacher passes back your test. You're looking for an A, but you got a C. Well, credit work the same way. Well, when we set loan rates for cars, for example. Let's say that our targeted car auto loan rate was let's say 8% for sake of our discussion. Well, that's the rate we would give our tier A, our best credit people. Well then if you came in and you're just a little bit below that in tier B, maybe you'd pay 9%. And if you're tier C, maybe you're paying 10%, well then you get the D, E, and I'm saying, wait a minute, I got more risk here. So maybe that rate sneaks up to 14% or maybe 16%. And if you think about it, that really costs you money across the board, because it's not just that one loan. Your car loan might be higher.

Your credit card rate might be higher. Your mortgage rate might be higher. So that's the first thing. You're going to pay higher interest rates. Second thing. It limits your credit options. Because you've got reduced approval chances for loans and credit cards. And if they do give it to you, you're going to get lower credit limits.
You're going to have less favorable terms and conditions. And you're not going to have those choices. I remember when I was going through my credit struggles, I found it really hard to find a credit card, but I would get these instant offers in the mail. Hey, Mr.

Ralph, you can go get this credit card.
You can go get this credit card and when you went to their website, it was like, wow, like this is some shady stuff here. And I look at the interest rates, 29.99%, a $250 annual fee, a $500 credit limit. See, that's the problem. When you've got bad credit, you limit your credit options. So that's number two thing. And think about the impact it has on housing and employment. We talked about the other side of this, you know, if you've got good credit, you can go get that mortgage loan.
You can go get that rental at that apartment. Because the truth of the matter is landlords are going to check your credit reports and they're going to deny you if your credit is not great. Another thing, you know, the other thing you need to look at is employment. I talked about this on the show a couple months ago. It could very well lead to you not getting that job you want because employers are looking at your credit history. And a lot of employers will absolutely not offer you a job or though withdraw it once they look at your credit score. So if you think about it, big picture, it's going to limit your housing and it's going to limit your career opportunities. And this is what a lot of people don't think about. Insurance premiums. Most insurance companies now use scoring models to price their insurance. So if you've got lower or challenged credit, you're going to pay higher premiums. And this was a statistic.

I was surprised when I did some research for the show. Auto insurance. Statistics show that if your credit is bad, you can pay up to 77% more for auto insurance. It also trickles down to home insurance and life insurance. And as we talked about. Those security deposit requirements. If you've got shaky credit, maybe your landlord will give you that apartment, but they're giving you a higher deposit for that rental, maybe your utility company, your cell phone provider, all those people want more upfront money for those basic services. And you think about it. And this is the thing that's really frustrating, but I get it from the business perspective, from the lending perspective, it's the people that can least afford it. The people whose credit is challenged, it usually means you're struggling. Well, they're putting a larger burden on you.

And like I said, I understood, I'm a capitalist. I get the point of it. I understand that. But it puts this huge financial burden on those people who can least afford it. So I think you get the point. We understand the benefits of bad credit.
But now I want to get to the meat of today's show. Cause I thought it we had to go down that road to really understand because Juliana had a really tough situation. She mentioned in there, her card got declined at the register. She had $3,000 worth of unauthorized charges, but the bigger thing was that hundred point score drop.
Now Juliana didn't ask me or didn't say to me, Hey, Ralph, my credit's usually pretty good. So I don't really know the answer. But she asked me about credit monitoring, Juliana, and that's what I want to talk about. So let's talk about that. Let's talk about what the core function of credit monitoring is because it, and unlike credit monitoring, I actually do it myself.

It's a proactive financial management tool. And what it does is it helps prevent and detect credit related issues early. That's the key to the whole thing. It catches them in their early stages. It's going to monitor your credit across all the major credit bureaus. Another great thing about these, and I'll give you a little bit of a tangent here.
So I'm a type two diabetic, and I guess it was about a month ago. I met with a new doctor and I'm actually going to have him on my, I had him on my show last week I should say. I always get confused with when which days episodes are going to get released, was actually on my show last week. And I talked about this some on that show and I encourage you to check it out. It was my interview with Dr. Alex Watson.
But anyway, all that said. One of the things he said to me, he said, Ralph, here's a great idea. He said, they have these things called these blood sugar monitors. It's actually on my arm over here right now. And I kind of put it off. My other doctor talked to me about, they say, you know, this way you can get a snapshot of where your blood sugar is all the time.

And I said, yeah, I don't really need that. You know, I get up in the morning. I can finger stick myself and see, oh, that sugar's not great. Well, when I look back at what I ate, there was a shock.
But the reason this is important is because now that I'm tracking this, I'm looking at this, it pops up on my phone.
If my sugar is high, it sends me an alert. If my sugar is low, it sends me alert. It goes back to one of the true things that I talk about in the show all the time. And that is what gets measured, gets done. Well, these credit apps do the same thing. They monitor your credit. They're going to monitor what's going on with Equifax, Experian, TransUnion. And they don't impact your credit score.

They just do soft inquiries, but you're going to be able to trace and track. And I just got an email a day or two ago said, Hey, here's your credit score. And I think that by measuring that, by keeping tuned with that, you're going to make a better decision. I know more myself, my overall blood sugar since I started doing this is down about 40%.
Because every time I eat something, I'm looking and going, okay, how does this affect my sugar? I got it right here on my apple watch and it says me, oh, your sugar is this number.

Great. So that actually leads me into the second thing about these credit monitoring. And it's the same thing I use for my constant glucose, that GCM.
I couldn't think of the name of it. That's what it is. These credit monitoring services will also notify you of new account openings. So if maybe you have an account that you didn't apply for. And we talked about doing credit freezes a week or two ago. I'm going to highly encourage you to do that, but maybe you didn't apply for credit.

Well this credit monitoring service is going to send you an email and say, Hey, you missed around. Did you apply for this? It's going to flag those inquiries. It's going to alert you if your personal information changes, like if somebody changes your address. It's a pretty good sign you got a problem. It's going to warn you about potential fraudulent activity, and it gives you those real time notifications of those significant changes in your credit.

So you don't have that shock like Juliana had when she went to the store. She got declined for a credit card, which I think is a whole another issue. But then when she pulled her credit and look, and checked her score had dropped a hundred points. So that's the whole point. Fraud protection, credit score management, all those things go into that.

Another big thing about it is dispute resolution. One of the things I love about this, most of the credit monitoring services is it will give you the ability to help you identify those errors, they help you navigate that dispute process, and they'll give you some guidance on how to handle those inaccuracies in a streamlined way because that can be burdensome. You know, like right now, Juliana, you've got this $3,000 charge or multiple charges on your account.

Well, if you've got one of these credit monitoring services, you can get in contact with them and help you work that out. Another great thing about these credit monitoring is there's a arsenal of tools they bring along. They bring along these credit improvement tools. They help you build that credit.

I know there was some commercials, so I think it was Capitol One a few years ago. People could sit there and I remember the commercials, people sit in there watching TV and they had their phone in front of them and say, well, if I pay off this, oh look at my credit score goes up by 50 points.
Or if I do this, my credit score goes down. I think that is huge because these credit monitoring places are providing educational resources. They can identify those areas that need improvement. Like maybe you've got too much outstanding credit. I talk about all the time, your credit utilization. Trying to keep that at 30%.

Well, if you've got one of these credit monitoring apps, you can take a snapshot and say, oh, here where I am just like I do with my blood pressure sensor. After I eat lunch or something like that, I can take a look and see what my blood sugar is and say, well, maybe no afternoon snack today. And the best part of these, it's going to suggest specific actions for score enhancement.

Now I'm not going to get into the details. We don't have time to go through each of the individual ones that are out there. I actually use Norton for mine, but one of the things that I do every day is I write a blog post and in today's blog post, which you can find at askralphpodcast.com/blog. I'll give you a ton of resources.

I'll talk about some of the leading credit monitoring services, and I'll give you a detailed explanation of what they do. So again, I would encourage you every day you can check these out. That's at askralphpodcast.com/blog. But Juliana, I want to get back to your question. So here are the three key things that I want you to do.
These are the crucial steps that I want you to take immediately. Number one. Take immediate action to secure your accounts. Call your credit card company immediately if you haven't already. Use that number on the back of your card and file a complaint with them. File a formal fraud report with your credit card issuer. Immediately request a new card because you probably need to have that credit card as then they give you a card with a different number and then start documenting everything. When discovered the fraud and all the correspondence, and immediately change passwords on all your financial accounts.

You have to operate under the expectation that you've got a major issue. Don't freak out about it. Pray about it but take immediate action. So that's number one. Number two. Place a free fraud alert and get your credit reports right away. I said weeks ago, one of the best things you can do is put a credit freeze on your account.
So contact the three credit bureaus and place that free fraud alert. Now they say they have to notify the other two. That's what I read about online. I don't know if that's true, in my opinion, go notify it all three. Get a copy of your credit report. See what else is going on with your credit.

You should be doing that anyway. And then review all the accounts and report any suspicious activity. And if you find that you do have identity theft, go to the identity theft, at the FTC, I'm going to put a link in the show notes about the show I did about how to report those identity theft things, and then go file a police report.

And number three thing, Juliana, this is important. The first two things were okay, we have to respond and react. The third thing I want you to do is to implement some preventive measures. And you don't have to break the bank to do these. You asked me specifically about these credit monitoring service, but here's the thing. You can set up free account alerts through your bank, through your credit union, through your credit card companies so that if something doesn't seem right, you know, for example. I remember a couple of years back, I had to set up all my American express. And I had an alert if the bill was more than, or if the charge was more than a certain amount, I got this pop-up on my phone. I'm like, what in the world is this. And I was able to find a fraud right at that point. I got in touch with the credit card issue and they shut that card down. It didn't cost me a dime, but a couple of minutes of time. So that's the first thing. Create those free account alerts. They are absolutely critical to your success. And then what I want you to do is monitor your accounts.

You can do this through your bank's free online banking. Take a look and see what's going on with your bank account. I have some clients and friends and individuals I work with to check their bank every day. I think that's actually a pretty good thing. It's not complicated to do. It's not like you have to in the old days, when you'd had to go to the bank and get a printout of your screen, you know of what's going on in your account and dial into the, I remember what they called at the time with telephone banking.

You have to listen to all your transactions. Now you get it right to your phone. So it doesn't hurt to just take a few minutes and check that. While we're talking about that, use strong unique passwords for all your financial accounts. I guess it kind of goes without saying, I mentioned again, doing that freeze on your credit report, and then if you want to. And I think there's value here, but you gotta balance this with the amount of money you want to spend. Look at those credit monitoring service.

Like I said, I talked about that in today's blog posts. I give you a one of some of the benefits of them. I give you some of the heavy hitters in that market. So you can find that again at askralphpodcast.com/blog. So here, Juliana, this is why you got to act right away. Time is critical. Every hour gives those fraudsters more chances to misuse your information.
You don't want that to happen. And quick action can prevent additional accounts from being opened in your name. And here's the thing. A lot of people don't know this. If you do things quickly, if you report this fraud quickly, most credit card companies are going to offer zero liability. In other words, you're not going to be responsible for any of these things.

So the sooner you report it, the stronger legal protections you're going to get and credit bureaus and credit card companies have established fraud protocols. They can't do anything unless you contact them. So start that process now, getting those fraudulent charges removed faster and your credit risk score will begin to recover once you file [00:25:00] those fraud reports. And here's the big takeaway Juliana. Taking action gives you immediate peace of mind. I can't fix the embarrassment of embarrassment that you had there at the register. I feel for you. I'm sure other people listen and feel for you because truth is, most of us have been there. So just remember that you're not alone on this journey. But that immediate action gets you back in control of your financial security, because here's the deal, Juliana.

And you said this in your question today and it is the truth. You're protecting not just yourself. You mentioned your two kids. You're protecting your family's financial future. So I'm going to encourage you get to working on that today. Well, let me ask you a question. Maybe like Juliana, has your heart ever stopped at the checkout counter when your card was declined? Have you felt that wave of panic checking your credit score,
just like Juliana did? That feeling of violation when someone steals your financial identity can shake you to your core, especially when you have little ones depending on you. And trust me, I've seen those tears. I've heard those prayers for guidance. And I'm here to tell you that this isn't the end of your story. Every week I sit with parents just like you, who thought their credit was damaged beyond repair.

They really do think that. But here's what they discovered. With the right guidance, you can rebuild it. You can restore, you can protect your family's future. And here's the best part. You don't have to figure this out alone. You don't have to lie awake at night wondering what to do next. I'm going to encourage you to visit askralph.com right now, and book your confidential consultation and together, we'll create a personalized plan to restore your credit. I'm going to help you restoring, I'm going to put together a plan that's just for you. We'll restore your credit.

We'll protect your family's financial future. So don't let another day of worry pass. Take that first step towards peace of mind. Because here's the truth. Your family deserves financial security. You deserve to sleep peacefully at night. Let's make that happen. Visit askralph.com, click on the button that says, book a call with Ralph and schedule with me because your credit story isn't over. It's not. All hope is not lost. It's just waiting for a new chapter.

Let me help you write that chapter. Again that's at askralph.com.
Well, as we wrap up today's discussion about credit security and family protection, I want you to take a moment and really reflect on these three question. These are my reflection questions for today.
One of the things I instituted a couple of weeks back that I really want to take a few minutes and I want you to reflect on the things we've talked about. So the first one is this. When was the last time you actually reviewed your credit card statements? I mean, line-by-line.

If something felt off, would you know exactly what steps to take?
That's a really tough question to ask. So think about it. A lot of people don't do it. They look at the balance and go, yeah that makes sense. I spent about that much last month. But I'm going to encourage you. Look at it line by line for two reasons. You might find fraud. I don't know how many times I've worked with business clients and we're putting their books together at the end of the year.

They drop off these credit card statements, these bank statements, and we're going through them. And I say, dude, did you realize this. I had no idea, Ralph. Well, you got to read your statements. And then if something seems off, would you know how to handle it? So that's the first one. Number two question. If your card was declined today like Juliana's, do you have a financial backup plan to feed your family while you sort out the fraud? And what would your first reactions be? Ask yourself.

You're at the register, just like Juliana. You got your two kids there. They're like me when I was a kid. Two of us are bouncing around, jumping in and out of the cart. Mom's credit card gets declined. What's your backup plan? What are those first three actions? That's something I want you to reflect on today.

And number three reflection question today. Think about your own credit monitoring habits. What are you doing today? Are you being proactive or are you just hoping nothing bad happens? That hope that nothing bad happens is a bad plan. That will lead you to problems. So what's one step you could take today to better protect your family's financial future? So I want you to sit with these questions for a moment. If any of them make you uncomfortable, they make you uncertain,
that's your signal that it's time to take action. And I'm going to encourage you askralph.com to schedule a call with me and let's turn that uncertainty into confidence.

Tomorrow we're going to tackle another important topic and that is this. "Wait, what are estimated taxes and do I actually have to pay them?" Got that question from a listener and I'm going to unravel that tomorrow.
So you don't want to miss it. And as I close today, remember this. My passion is to help you achieve financial success. I want to see you live out your dreams, and I want to see you grow in your faith. And I know together we can master your finances from a Christian perspective. So as I always encourage you, there is hope Juliana. And all the rest of you listening. I can help you restore your credit. You can do it. It's not going to happen overnight, but we can make it happen.

So stay financially savvy out there.
Consider those credit monitoring services and may God bless you in your journey today.
























































































































































Welcome to the Ask Ralph show, where we master your finances from a Christian perspective. I'm your host, Ralph, and I am excited to share today's powerful message about credit monitoring and smart credit management.

Now, if you missed yesterday's show, we talked about being locked out of the E filing system and the secret pin that changes everything. Make sure you check it out because it could save you hours of frustration during tax season. You'll find all our episodes@askralph.com.

well, today's question comes from Julianna, and she writes this. Dear Ralph, I'm writing to you with tears in my eyes.

Last night, I discovered over $3,000 in unauthorized charges on my credit card while trying to purchase groceries for my family. My card was declined right there at the checkout. How humiliating. When I checked my credit score, I was devastated to see it had dropped 100 points.

I feel violated. I feel scared, and honestly, a bit angry at myself for not being more careful.

As a mom of two young children, I've worked so hard to build good credit, and now it feels like it's all falling apart. I've heard about credit monitoring services, but with my tight budget, I don't know if they're worth the money.

I pray every night for guidance, but I just feel lost. What should I do to protect myself and my family from this happening again? Well, Julianna, first of all, thank you for your Heartfelt question.

I hear the emotion in your voice, and that is an absolutely startling thing. When you find out that there was $3,000 in unauthorized charges on your credit card. And if you're like most people, that's a big deal.

And I know how that triggered this immediate fear and violation. And it sounds to me like what you're saying is you're careful about it, but even when you're being careful, you're still vulnerable.

Listen, that embarrassment at the grocery store checkout, I've had that happen to me. And I don't know about you, but I look around it. Did anybody see that?

And most of the time in my, my experiences, the clerk's usually pretty good about saying, hey, do you have another form of payment? It's happened to me there. It's happened to me at a restaurant before. And so everybody feels you. Your fear on that, your humiliation.

And then when you checked your credit to find that your credit score had dropped a hundred points. We need to figure out what's going on there because these financial issues are affecting both your practical and your emotional aspects of your life.

And Julianna, so here's my promise to you. Don't worry. I've got answers and guidance for you today.

And remember, if you've got a question like Juliana, one of the best things you can do is go right to askraft.com and click on the little search icon. Chances are I've talked about the financial topic before and it's a great place to get some in depth information, Even if it's 3:00 in the morning.

So I encourage you, go check out askralph.com and look at our catalog of almost 700 episodes. I've got blog posts, I've got videos out there. We've got a wealth of information.

And if you find that I haven't answered your question already, just go to. Just ask Ralph.com and send it to me and I'll put it on the show.

Well, Juliana, your situation made me think about what's a great verse to talk about today. And this one is going to seem a little counterintuitive, and it might seem a bit abrasive, but that's not my intention. So let me jump right to it.

It's from First Timothy, chapter 6, verses 10. And it tells us this. For the love of money is the root of all kinds of evil. Now why did I pick that verse today?

Because it reminds us that while money itself isn't evil, money itself is a tool. But we've got to manage it wisely. And we've got to protect ourselves.

And one of the best ways to do that is to protect ourselves from those who might take advantage of us through fraud or identity theft.

Well, let me get right to my gratitude statement today, because today I'm grateful for the tools and wisdom that help us be better stewards of our financial resources. And Julianna, your question really is about what tools can you use to improve your credit?

So let's talk about some of those tools today and let's start by discussing the impacts of credit. Well, let me start by talking about the benefits of good credit.

And Julianne, I think you already know this and I often share this with listeners because this is an area I've struggled with myself. There have been times in my life when my credit was a disaster. It is not an easy process to recover from that. Juliana.

So I hear you and other people who are listening, I hear you. So I'm going to give you some ways to make that better today. But let's start by talking about what the benefits of having good credit are.

The first and immediately obvious thing, it gives you lower interest rates because lenders view you as a low risk. The higher your credit score, the more low risk the lender is going to see you.

Well, if they see you as a low risk, then you're going to qualify for better rates on loans. You're going to qualify for better rates on credit cards and mortgages and, and car loans.

And that can save you thousands of money on interest to mention the mortgage interest savings. And think about it like this.

When you have good credit and the lenders see you as a good risk, it lowers your payments across all the credit products and it makes it more affordable for financing those major purchases. So that's the first thing, lower interest rates.

Second thing enhances your credit card benefits because a lot of times as your credit improves, it opens up the door to a bunch of premium reward programs, maybe get higher cash back percentage, you get better travel rewards and miles.

And for example, like I've got a Platinum American Express and I don't say that to brag about it, but I've honored my credit, I've worked very hard to restore it and now I get a ton of benefits from that. I get lower annual fees, I get premium cards and I get exclusive, you know, what they call card holder perks.

So those are all the benefits of, of having that good credit. That's an enhanced credit card benefits. Obviously you get improved approval odds.

If your credit is good, you've got A higher likelihood of getting that loan approved in the first place. Maybe you're looking to rent a home or rent an apartment. If your credit is good, you've got a better chance.

With those rental applications, it's easier to apply and get approved for credit cards. It gives you more options in financing and there's less likelihood of rejection. Related credit damage. See, that's the problem.

A lot of people don't think about this. I talk about this on the show all the time. It's sort of a. I call it the death credit spiral.

When you start to see that your credit is deteriorating, a lot of people run out and try to get more credit, which leads to more denials, which leads to your credit score even dropping more. So that's another thing, improved approval odds. You also have stronger negotiating positions because you've got leverage with the lenders.

For example, when I used to run the credit union, when a person would come in, a member would come in and their credit was excellent. Hey, sue, hey. They could set the tone because I wanted their loan, they were a good credit risk. I was able to give them better loan terms.

I could negotiate lower fees, I could give them higher credit limits and it gave them a better position if they were looking to refinance existing debt. If they came to me and they said, rob, listen, I've got this credit card with this bank, I've got this car loan with this institution.

And hey, I look at their credit score, they've got great credit. I want to grab those loans. Which means they have this negotiating strength, they have this negotiating power.

Another thing that good credit will bring you is reduced deposit requirements. One of the things that a lot of people don't think about. I see this a lot with first time home buyers.

I'm going to be talking about some pitfalls of that here in a week or so. But if your credit is good, it will reduce or completely waive utility deposits. I remember when I changed my cell phone plan.

All this has probably been 25 years ago. I've been, I've been with the same plan forever, probably should shop around, but I haven't.

But anyway, when I did that, remember they said, well we, Mr. Reset, we need to pull your credit.

And then they came back and said, well, you know, you've got some credit challenges so you're going to have to put a deposit on each of the lines. I said, wow, I wasn't expecting that. Well, people see that too with utility deposits and if. And the same thing with rental deposits.

And like I mentioned, there's cell phone services. If you have to put those money down on deposits, that really ties up your cash.

So if you have good credit, you've got those reduced deposit requirements, it gives you better cash flow and you've got more availability to your funds. You don't have to lock that up with the deposit with the electric company or deposit with the water.

I know there's a town a little bit south of here and they, I think the number now is like five or six hundred bucks. They make you put down a security deposit for your utilities. Now my understanding is in their particular case, they don't pull your credit at all.

So you're paying for it either way. So that's another really good benefit of having good credit. You get those reduced deposit requirements. It also gives you financial security.

I think this is the big takeaway of why good credit is so important. It reduces your financial stress. You've got greater confidence in making financial decisions.

It gives you more options during emergencies and it helps you build better long term financial planning because you've got that flexibility, you're not locked into a particular lender. Now the truth of the matter is if you think about it, as your credit improves, your overall financial position is probably improving.

You've got those emergency funds, you're building up assets and all those sort of things. And remember this. And these benefits aren't just about saving money. I wish that was all there was to it, but they're not.

And this is why I tie so keenly into the show today. They're about being a good steward of the resources God has entrusted to us. Because here's a truth, mom.

When we manage our credit wisely, we're better positioned to serve others and better fulfill our God given purpose. Now we've talked about the good, let's talk about the bad because we've got to discuss the impacts of bad credit.

And Julianne, I think you understand where I'm going here.

So just like you've got those lower interest rates with good credit, you're going to get nailed with higher interest rates if your credit's a little shaky. Because here's the bottom line. I've been in this position. I made these lending decisions.

Lenders charge more because there's a higher level of default risk. There's a bigger chance that you're not going to pay.

And bad credit borrowers pay significantly more over time for loans and it's difficult securing those approvals. And listen, this is the honest to God truth. I did what's called risk based lending and let me take a minute and explain that.

So the way it worked is this. You came in for a loan at my credit union when I was working there. And again, that's been over 20 years ago.

I would pull your credit score and we had tiers, like a tier B tier.

See, just like when you were in school, like if you're a little kid in school, the teacher passes back your test, you're looking for an A, but you got a C. Well, credit worked the same way.

Well, when we set loan rates for cars, for example, let's say that our targeted car auto loan rate was, let's say, 8% for sake of our discussion. Well, that's the rate we would give our tier A our best credit people.

Well, then if you came in and you're just a little bit below that in tier B, maybe you'd pay 9%. And if you're tier C, maybe you're paying 10%. Well, then you get the D E. And I'm saying, wait a minute, I got more risk here.

So maybe that rate sneaks up to 14% or maybe 16%. And if you think about it, that really cost you money across the board because it's not just that one loan.

Your car loan might be higher, your credit card rate might be higher, your mortgage rate might be higher. So that's the first thing, you're going to pay a higher interest rate.

Second thing, it limits your credit options because you've got reduced approval chances for loans and credit cards.

And if they do give it to you, you're going to get lower credit limits, you're going to have less favorable terms and conditions, and you're not going to have those choices.

I remember when I was going through my credit struggles, I found it really hard to find a credit card, but I would get these instant offers in the mail. Hey, Mr. Ralph, you can go get this credit card. You can go get this credit card.

And when you went to their website, it was like, wow, like, this is some shady stuff here. And I look at the interest rates, 29.99%, a $250 annual fee, a $500 credit limit. See, that's the problem.

When you've got bad credit, you limit your credit options. So that's number two thing. And think about the impact it has on housing and employment. We talked about the other side of this.

You know, if you've got good credit, you can go get that mortgage loan, you can go get that rental at that apartment. Because the truth of the matter is landlords are Going to check your credit reports, and they're going to deny you if your credit is not great.

Another thing, you know, the other thing you need to look at is employment. I talked about this on the show a couple months ago.

It could very well lead to you not getting that job you want, because employers are looking at your credit history. And a lot of employers will absolutely not offer you a job or they'll withdraw it once they look at your credit score.

So if you think about it, big picture, it's going to limit your housing and it's going to limit your career opportunities. And this is what a lot of people don't think about, insurance premiums. Most insurance companies now use scoring models to price their insurance.

So if you've got lower or challenged credit, you're going to pay higher premiums. And this was a statistic. I was surprised when I did some research for the show.

Auto insurance statistics show that if your credit is bad, you can pay up to 77% more for auto insurance. It also trickles down to home insurance and life insurance.

And as we talked about those security deposit requirements, if you've got shaky credit, maybe your landlord will give you that apartment, but they're giving you a higher deposit for that rental. Maybe your utility company, your cell phone provider. All those people want more upfront money for those basic services.

And you think about it, and this is the thing that's really frustrating, but I get it from the business perspective, from the lending perspective, it's the people that can least afford, the people whose credit is challenged. That usually means you're struggling. Well, they're putting a larger burden on you. And like I said, I understand, I'm a capitalist.

I get the point of it. I understand that. But it puts this huge financial burden on those people who can least afford it. So I think you get the point.

We understand the benefits of bad credit, but now I want to get to the meat of today's show because I thought we had to go down that road to really understand, because Juliana had a really tough situation. She mentioned in there, her car got declined at the register. She had $3,000 worth of unauthorized charges.

But the bigger thing was that hundred point score drop. Now, Juliana didn't ask me or didn't say to me, hey, Ralph, my credit's usually pretty good, so I don't really know the answer.

But she asked me about credit monitoring, Julianna, and that's what I want to talk about. So let's talk about that. Let's talk about what the core function of credit Monitoring is because, and I like credit monitoring.

I actually do it myself. It's a proactive financial management tool and what it does is it helps prevent and detect credit related issues early.

That's the key to the whole thing. It catches them in their early stages. It's going to monitor your credit across all the major credit bureaus.

Another great thing about these, and I'll give you a little bit of a tangent here.

So I'm a type 2 diabetic and I guess it was about a month ago I met with a new doctor and I'm actually going to have him on my, I had him on my show last week, I should say. I always get confused with when, which days episodes are going to get released.

Was actually on my show last week and I talked about this some on that show and I encourage you to check it out. It was my interview with Dr. Alex Watson. But anyway, all that said, one of the things he said to me, he said, ralph, here's a great idea.

He said, they have these things called these blood sugar monitors and it's actually on my arm over here right now. And I kind of put it off. My other doctor talked to me about it.

They said, you know, this way you can get a snapshot of where your blood sugar is all the time. And I said, yeah, I don't really need that. You know, I get up in the morning, I can finger stick myself and see, oh, that sugar's not great.

Well, when I look back at what I ate, there's a shock. But the reason this is important is because now that I'm tracking this, I'm looking at this, it pops up on my phone.

If my sugar is high, it sends me an alert. If my sugar is low, it sends me alert. It goes back to one of the true things that I talk about on the show all the time.

And that is what gets measured, gets done. Well, these credit apps do the same thing. They monitor your credit. They're going to monitor what's going on with Equifax, Experian, TransUnion.

And they don't impact your credit score, they just do soft inquiries. But you're going to be able to trace and track. You know, I just got an email a day or two ago said, hey, here's your credit score.

And I think that by measuring that, by keeping, you know, tune with that, you're gonna make better decisions. I know more myself.

My, my overall blood sugar since I started doing this is down about 40% because every time I eat something I'm looking and Going, okay, how does this affect my sugar? I got it right here on my Apple watch and it says to me, oh, your sugar's this number. That's not great.

So that, that actually leads me into the second thing about these credit monitoring. And it's the same thing I use for my constant glucose, a GCM I couldn't think of the name of. That's what it is.

These credit monitoring services will also notify you of new account openings. So if maybe you have an account that you didn't apply for. Now we talked about doing credit freezes a week or two ago.

I'm a, I'm a highly encourage you to do that. But maybe you didn't apply for credit. Well, this credit monitoring service is going to send you an email and say, hey you, Mr.

Ralph, did you apply for this? It's going to flag those inquiries.

It's going to alert you if your personal information changes, like if somebody changes your address, it's a pretty good sign you got a problem. It's going to warn you about potential fraudulent activity.

And it gives you those real time notifications of those significant changes in your credit. So you don't have that shock like Juliana had when she went to the store. She got declined for a credit card, which I think is a whole nother issue.

But then when she pulled her credit and looked at her, her score had dropped a hundred points. So that's the whole point. Fraud protection, credit score management, all those things go into that. Another big thing about it is dispute resolution.

One of the things I love about this, most of the credit monitoring services is it will give you the ability to help you identify those errors, they help you navigate that dispute process, and they'll give you some guidance on how to handle those inaccuracies in a streamlined way. Because that can be burdensome, you know, like right now, Juliana, you've got this $3,000 charge or multiple charges on your account.

Well, if you've got one of these credit monitoring services, you can get in contact with them and help you work that out.

Another great thing about these credit monitoring is there's a arsenal of tools they bring along, they bring along these credit improvement tools, they help you build that credit. I know there were some commercials, I think it was Capital One a few years ago.

People could sit there and I remember the commercial people sitting there watching TV and they had their phone in front of them and say, well, if I pay off this, oh, look at my credit score goes up by 50 points. Well, if I do this, my credit score goes down. I think that is huge because these credit monitoring places are providing educational resources.

They can identify those areas that need improvement. Like maybe you've got too much outstanding credit. I talk about all the time your credit utilization, trying to keep that at 30%.

Well, if you've got one of these credit monitoring apps, you can take a snapshot and say, oh, here I am, just like I do with my, my blood pressure sensor after I eat lunch or something like that. I can take a look and see what my blood sugar is and say, well, maybe no afternoon stack today.

And the best part of these, it's going to suggest specific actions for score enhancement. Now, I'm not going to get into the details. I don't have time to go through each of the individual ones that are out there.

I actually use Norton for mine. But one of the things that I do every day is I write a blog post.

And in today's blog post, which you can find@askralphpodcast.com blog, I'll give you a ton of resources. I'll talk about some of the leading credit monitoring services and I'll give you a detailed explanation of what they do.

So again, I would encourage you every day. You can check these out. That's@askralphpodcast.com blog. But Julianna, I want to get back to your question.

So here are the three key things that I want you to do. These are the crucial steps that I want you to take immediately. Number one, take immediate action to secure your accounts.

Call your credit card company immediately if you haven't already. Use that number on the back of your card and file a complaint with them. File a formal fraud report with your credit card issuer.

Immediately request a new card because you probably need to have that credit card.

Ask them to give you a card with a different number and then start documenting everything where you discovered the fraud and all the correspondence and immediately change passwords on all your financial accounts. You have to operate under the expectation that you've got a major issue. Don't freak out about it, pray about it, but take immediate action.

So that's number one. Number two, place a free fraud alert and get your credit reports right away. I said weeks ago.

One of the best things you can do is put a credit freeze on your account. So contact three credit bureaus and place that free fraud alert. Now they say they have to notify the other two. That's what I read about online.

I don't know if that's true. In my opinion, go notified all three. Get a Copy of your credit report, see what else is going on with your credit. You should be doing that anyway.

And then review all the accounts and report any suspicious activity. And if you find that you do have identity theft, go to the identity theft at the ftc.

I'm going to put a link in the show, notes about the show I did about how to report those identity theft things and then go file a police report. And number three thing, Juliana, this is important. The first two things were, okay, we have to respond and react.

The third thing I want you to do is, is to implement some preventive measures. And you don't have to break the bank to do these. You asked me specifically about these. Credit monitoring service. But here's the thing.

You can set up free account alerts through your bank, through your credit union, through your credit card companies, so that if something doesn't seem right, you know, for example, I remember a couple of years back, I had to set up on my American Express and I had an alert if the bill was more than or if the charge was more than a certain amount. I got this pop up on my phone like, what in the world is this?

And I was able to find a fraud, right at that point, I got in touch with the credit card issue or they shut that card down. Didn't cost me a dime, but a couple minutes of time. So that's the first thing. Create those free account alerts.

They are absolutely critical to your success. And then what I want you to do is monitor your accounts. You can do this through your banks. Free online banking.

Take a look and see what's going on with your bank account. I have some clients and friends and individuals I work with that check their bank every day. I think that's actually a pretty good thing.

It's not complicated to do.

It's not like you have to in the olden days when you'd had to go to the bank and get a printout of your screen, you know, of what's going on in your account. You had to dial into the. I remember what they called at the time, like telephone banking. You have to listen to all your transactions.

Now you get it right to your phone. So it doesn't hurt to just take a few minutes and check that.

While we're talking about that, use strong, unique passwords for all your financial accounts. I guess it kind of goes without saying. I mentioned again doing that freeze on your credit report.

And then if you want to, and I think there's value here, but you gotta balance this with the amount of money you wanna spend. Look at those. Credit monitoring service. Like I said, I talked about that in today's blog post. I give you one of some of the benefits of them.

I give you some of the heavy hitters in that market. So you can find that again@askraftpodcast.com blog. So here, Juliana. This is why you gotta act right away. Time is critical.

Every hour gives those fraudsters more chances to misuse your information. You don't want that to happen. And quick action can prevent additional accounts from me and opening your name. And here's the thing.

A lot of people don't know this. If you do things quickly, if you report this fraud quickly, most credit card companies are going to offer zero liability.

In other words, you're not going to be responsible for any of these things. So the sooner you report it, the stronger legal protections you're going to get.

And credit bureaus and credit card companies have established prod protocols. They can't do anything unless you contact them. So start that process now, getting those fraudulent charges removed faster.

And your credit score will begin to recover once you file those fraud reports. And here's the big takeaway, Julian. Taking action gives you immediate peace of mind. I can't fix the embarrassment.

Embarrassment that you had there at the register. I feel for you. I'm sure other people listening feel for you. Because truth is, most of us have been there.

So just remember that you're not alone on this journey. But that immediate action gets you back in control of your financial security. Because here's the deal, Joanna.

And you said this in your question today, and it is the truth. You're protecting not just yourself. You mentioned your two kids. You're protecting your family's financial future.

So I'm going to encourage you get to working on that today. Well, let me ask you a question. Maybe you're like Julianne. Has your heart ever stopped at the checkout counter when your card was declined?

Have you felt that wave of panic checking your credit score just like Juliana did? That feeling of violation when someone steals your financial identity can shake you to your core.

Especially when you have little ones depending on you. And trust me, I've seen those tears. I've heard those prayers for guidance. And I'm here to tell you that this isn't the end of your story.

Every week, I sit with parents just like you who thought their credit was damaged beyond repair. They really do think that. But here's what they discovered. With the right guidance, you can rebuild it.

You can restore, you can protect your family's future. And here's the best part. You don't have to figure this out alone. You don't have to lie awake at night wondering what to do next.

I'm going to encourage you to visit askralph.com right now and book your confidential consultation. And together we'll create a personalized plan to restore your credit. I'm going to help you restore.

I'm going to put together a plan that's just for you. We'll restore. Your credit will protect your family's financial future. So don't let another day of worry pass.

Take that first step towards peace of mind, because here's the truth. Your family deserves financial security. You deserve to sleep peacefully at night. Let's make that happen.

Visit askralph.com, click on the button that says book a call with Ralph and schedule with me. Because your credit story isn't over. It's not. All hope is not lost. It's just waiting for a new chapter. Let me help you write that chapter again.

That's@askralph.com well, as we wrap up today's discussion about credit security and family protection, I want you to take a moment and really reflect on these three questions. These are my reflection questions for today.

One of the things I instituted a couple weeks back that I really want to take a few minutes and I want you to reflect on the things we've talked about. So the first one is this. When was the last time you actually reviewed your credit card statements? I mean, line by line.

If something felt off, would you know exactly what steps to take? That's a really tough question to answer. Think about it. A lot of people don't do it. They look at the bouncing. That makes sense.

I spent about that much last month. But I'm going to encourage you look at it line by line for two reasons. You might find fraud.

I don't know how many times I've worked with business clients and we're putting their books together at the end of the year. They drop off these credit card statements, these bank statements, and we're going through them and I say, dude, did you realize this? I had no idea.

Raffle. You gotta read your statements. And then if something seems off, would you know how to handle it? So that's the first one. Number two question.

If your card was declined today, like Juliana's, do you have a financial backup plan to feed your family while you sort out the fraud? And what would your first three actions be? Ask yourself. You're at the register, just like Juliana.

You got your two kids there like me when I was a kid. Two of us are bouncing around, jumping in and out of the cart. Mom's credit card gets declined. What's your backup plan?

What are those first three actions? That's something I want you to reflect on today. And number three, reflection question. Today, think about your own credit monitoring habits.

What are you doing today? Are you being proactive or are you just hoping nothing bad happens? That hoping nothing bad happens is a bad plan that will lead you to problems.

So what's one step you could take today to better protect your family's financial future? So I want you to sit with these questions for a moment. If any of them make you uncomfortable, they make you uncertain.

That's your signal that it's time to take action. And I'm going to encourage you visit askralph.com to schedule a call with me. And let's turn that uncertainty into confidence.

Tomorrow we're going to tackle another important topic, and that is this. Wait. What are estimated taxes and do I actually have to pay them?

Got that question from a listener and I'm going to unravel that tomorrow so you don't want to miss it. And as I close today, remember this. My passion is to help you achieve financial success.

I want to see you live out your dreams and I want to see you grow in your faith. And I know together we can master your finances from a Christian perspective.

So as I always encourage you, there is hope, Julian and all the rest of you listening, I can help you restore your credit. You can do it. It's not going to happen overnight, but we can make it happen.

So stay financially savvy out there, consider those credit monitoring services, and may God bless you in your journey today.

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