How To Build And Establish Your Credit The Right Way Financial facts
There are a number of statistics that most people know about the severity of America’s wealth gap. For example, the median wealth of white families is 6.7 times greater than the median wealth of black families. According to a recent Credit Sesame survey, about 54% of black Americans report having no credit or a poor to fair credit score, which is considered a score below 640. About 41% of Hispanic Americans report also belong to this category. .
The importance of credit and the lack of access to financial literacy can make people feel that the system is against them. Still, for Mickey Factz, his goal of creating tangible ideas and projects that help improve his community’s credit rating is of the utmost importance.
The New York rapper has spent the last few years developing his understanding of financial literacy. Mickey’s quest for dollars and common sense ultimately resulted in a partnership with Kiddie Kredit, a mobile app that uses chores as a method to make credit easier for kids to understand.
Now, we’ve brought in Mickey for Financial Facts, a four-part weekly series where he offers personal advice on a variety of money matters. Following up on his conversation on budgeting, here’s Part 2, where Mickey takes a look at five facts meant to help you discover the importance of having and maintaining good credit.
Complex: In your experience, what basis do you need to maintain consistency with your budget?
Mickey Factz: Credit, man. Credit is basically everything — and I’m not just talking about having enough to get a credit card and swipe it. Credit is how financial institutions view us as responsible people in society. That’s really all the credit: “Can I trust you with this amount of money to pay me back and make your dreams come true?” “
In my opinion, as I have become familiar with using credit cards, I think they should be used all the time. There shouldn’t be a need for a debit card, to be frank. Aside from a strip club, most of the time you don’t need cash. Everyone exchanges money through FinTech, like Apple Pay, CashApp, PayPal, or Zelle. You can pay whoever you want this way and it eliminates the need to carry cash.
What should someone who just learned about credit cards and credit reports consider before taking the plunge?
MF: Credit is the cornerstone of everything when it comes to finances. Sometimes you can’t get a job if you have bad credit. You cannot move into a specific neighborhood if you have insufficient credit. If you have good credit, you can go to a car dealership, spend less money, and get a car you want with a low interest rate because they understand you know how credit works.
Growing up in my black youth, credit cards were a way of stealing for me because my friends told me “money is king”. Money is king in some cases, yes, but credit is the ace or the big wildcard, because as you move through the financial world, using credit to achieve your dreams is a major key.
How was your partnership with Kiddie Kredit born and what impact has your financial career had on young people?
MF: Kiddie Kredit contacted me after my freestyle on the Funkmaster Flex show [about financial literacy]. They asked me to be a brand ambassador to give classes on creating credit to children aged 8 to 13. all this at school. [Laughs] Instead, we dissect frogs.
Kiddie Kredit is a mobile tracking app that uses chores to educate kids about building credit. If they complete enough tasks, they can show the results to their parents and “increase their credit” to make financial decisions with their allowance. But, if all you’ve done is ask for things, even though you’ve done your chores, you learn that credit is the same as with your credit report – asking for too many credit cards can damage you. your credit because good.
I. Understanding credit:
This is the secret to having access to the money that will help you make your dreams come true and provide you with opportunities to start your own business.
II. Find out what your debts are:
Healthy debt is important for growing your financial literacy, and knowing what healthy debt you can use to boost your bottom line is very important. The bad debts you have will give you some insight into what you need to clear your books before you apply for a house or a credit card.
III. Learn About Compound Interest:
For those who don’t know, compound interest simply means earning interest on your savings, and also, possibly, the interest that those savings earn. The sooner you can learn this and pass this information on to others, the sooner they can earn their own compound interest.
IV. Favor investment:
In my opinion, investing is educated gambling, and with that, one should only put on the market money that you are willing to lose. One to five percent of your money should be spent on saving for the month, investing in yourself, and if you’re bold enough, take an extra $ 100 and put it on the market. You should always have money on the move in case another GameStop situation arises and you don’t miss it.
V. Give up fear and accept the risks:
It is essential and imperative that people plan for the future, and there is no time like the present to do so. You don’t want a surprise to throw you out of your game, or find yourself in a precarious situation where now you are packing your groceries in your fifties and sixties because you didn’t plan for it. moment. Now is the time to let go of fear, to accept the risks that come with today’s opportunities so that you can relax on the beach when you get older.
Check back next week for Part 2 of Financial Facts, where Mickey gives insightful advice on entrepreneurship. In the meantime, you can review Part 1 to learn more about budgeting.