June 15, 2025 • 36 mins
If you’ve been carrying the weight of debt and avoiding your credit report like it’s bad news waiting to happen, you’re not alone—and you don’t have to stay stuck. In this special Sunday recap episode, Ralph walks through six of the most powerful strategies discussed throughout the week, from staying motivated when debt feels overwhelming to repairing your credit and using financial tools with wisdom. Whether you’re unsure where to start or feeling worn out by past attempts, this episode will equip you with the biblical mindset and practical tools you need to finally tackle debt.
Check out the full podcast episode here
You’ll hear listener questions that bring real-life struggles into focus and get faith-fueled responses that mix scriptural truth with step-by-step guidance. Ralph revisits key points from the week, including balance transfer traps, building your emergency fund, how to use credit without falling into debt, and disputing credit report errors effectively. If you’re ready for a reset—both financially and spiritually—this episode is your invitation to step into clarity, take back control, and pursue lasting peace rooted in stewardship.
Chapters:
- 00:05 - Strategies for Financial Freedom
- 00:20 - Understanding the Journey to Financial Confidence
- 17:42 - Navigating the Use of Credit Wisely
- 22:08 - Understanding Credit Scores and Their Impact
- 35:20 - Transitioning to Income Strategies
Takeaways:
- If you're feeling crushed by debt, remember it's a marathon, not a sprint, so pace yourself and celebrate the small victories along the way.
- Understanding your credit score is essential; it's like a report card for your financial health that can impact your ability to borrow money.
- When considering balance transfers or consolidations, do your homework and make sure you won't just end up in the same debt cycle again.
- Building an emergency fund is crucial; it acts as your financial safety net when life throws curveballs your way, so prioritize saving!
- Learning to use credit cards wisely can be beneficial, but only if you commit to paying off your balance in full every month to avoid nasty interest charges.
- Fixing mistakes on your credit report can help improve your score, so don't ignore old collection accounts; dispute inaccuracies and stay proactive.
Links referenced:
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Ralph (00:00):
Are you tired of feeling crushed by debt?
Does the thought of your creditscore fill you with dread?
This week we're cutting throughthe confusion and join me as we
recap six powerful strategies forattacking debt and mastering credit,
answering your toughest questionswith actionable, fuel-filled steps.
Don't miss this crucial episode ofFinancially Confident Christian.
(00:20):
Your path to financialfreedom starts right now.
Hey there.
Welcome back to your specialSunday edition of Financially
(00:42):
Confident Christian.
I'm Ralph and it's great to be withyou for another exciting recap episode.
This show helps you answer thatquestion, how can I become a
financially confident Christian?
And over the past six days, we'vecontinued our conversation into
confronting debt and navigating thatoften confusing world of credit.
(01:02):
These are often areas that bringsignificant stress to people, but also
they're huge opportunities for freedomwhen we can approach them wisely.
And today we're gonna go quickly recapeach of those six episodes, and then
for each one, I've got some greatlistener questions that have come in
that really bring these concepts to life.
So grab a warm drink, get comfortable,and let's get into our recap today.
(01:26):
This past week has been packed withstrategies for attacking debt and
gaining clarity on your credit decisions.
We started the week withthis simple question.
How do I stay motivated whenpaying off debt feels hopeless?
And in that show, we really focused onkeeping your goals visible and celebrating
milestones and really drawing strengthfrom faith and from your community.
(01:49):
I think that was a really good show,and if you missed any of them, I'm gonna
encourage you to go back and listen.
The second thing we got to secondin the week, we asked this question,
should I use a balanced transfer orconsolidation for high interest debt?
we discussed prayerfully researchingthese tools to accelerate payoff while
understanding your risk associatedwith those things by midweek, we
(02:11):
had reached this question, how canI avoid getting back into debt?
We covered developing conscious habitsand those boundaries like that wait or
what I call the pause rule and reallyworking to strengthen your emergency fund.
Then we got to Thursday's episode andwe asked this very pointed question,
and that was, can I use creditwisely without falling into debt?
(02:33):
That was a question that was reallyon the mind of a lot of people and
I really emphasized that strictself-discipline and committing to pay
that full statement balance each month.
In fact, that was thecommitment that we made.
Are you sticking with your commitment?
I sure hope you are by Friday.
We got to.
What does my credit scoreactually mean for me?
A lot of people get all hungup on those credit scores.
(02:55):
So we demystified the creditreports we talked about credit
scores and we discussed accessingyour free report for awareness.
Again, that was annual credit report.com.
And then on Saturday we got to thisbig takeaway question, how can I fix
mistakes and improve my credit score?
We talked about disputing errors andfocusing on those key habits like.
(03:16):
On time payments andlow credit utilization.
It has really been a weekof strategic debt attack and
empowering credit knowledge.
And these topics, they bring outsignificant questions and they,
they talk about real strategies.
And I've got some excellent questionsfrom listeners just like you who
asked questions after the show.
So let's get to our first questionrelated to how do I stay motivated
(03:40):
when debt feels hopeless.
This question came to us fromMichael, and Michael wrote this.
He said, Ralph, I've been usingthe debt snowball and finding
extra money like you said.
I paid off my first small debt and thatfelt great for a minute, but looking
at the next one, it's much bigger andI'm already feeling discouraged again.
How do I keep celebrating thosewins and stay motivated when the
(04:04):
next mountain looks so much higher?
Wow.
Michael, you're absolutelyright, and thank you for your
honesty in asking that question.
Because that feeling that you'rehaving right now is incredibly common.
I remember going through this myself whenI was going through that debt spiral,
that debt cycle, and I got the first onepaid off and I felt, you know, fantastic.
I got this debt paid off and then Ilooked on my sheet and I was like, oh,
(04:26):
here, this next one, this is a doozy.
So Michael, this feels incredibly common.
A lot of people are dealing with that,and you have to think about it in this
term, like I said, during that show,and I'm gonna repeat it right now.
This is not a sprint, it's amarathon paying off your debts.
You didn't make 'em overnight.
So it is a marathon to get them paid off.
(04:47):
And I just want you toremember this truth.
And this one came to us from thebook of Hebrews chapter 12, verses
one and two, and it says this.
Therefore, since we are surrounded bysuch a great cloud of witnesses, let
us throw off everything that hindersand the sin that so easily, entangles.
Let us run with perseverance.
The race marked out for us, fixingour eyes on Jesus, the pioneer and
(05:11):
the perfecter of faith for the joyset before him, he endured the cross
scorning it's shame and sat down atthe right hand of the throne of God.
And I just thought that was such apowerful verse to talk about today because
what it's really key in on Michael andeveryone else listening is it's your why.
It's that why for debt freedom.
(05:34):
Because if you don't understand yourwhy, it is really hard to keep moving.
And that's why I talked about that.
You know, How do I stay motivatedwhen paying off debt feels hopeless?
That was the whole point.
And we talked about the exercisethat I'm gonna mention here
in a second during that show.
And that is to really visualizethat fully debt-free future.
(05:54):
What does that look like for you?
Not worrying about that debthanging over your head and that
big mountain in front of you.
I really focused on, developing thewhy for you because you gotta keep
that why visible in front of you sothat you know what you're working for.
The second thing we talked about,it's breaking down that journey into
smaller milestones beyond just thatfirst debt because Michael, it's
(06:16):
great you got past that first one.
That's the whole point of usingthat method, and maybe you hit that
total amount paid goal that you werelooking for with that first one.
But maybe it's time to sort of refocus.
Maybe you wanna set a certain dollaramount goal, maybe, I don't know
how much debt you have, but let'sjust say you have $10,000 in debt.
Well, maybe you set a goal for, I'm gonnapay the first 2,500 off, or maybe half
(06:40):
or whatever that next specific debt is.
I'm gonna really encourage you to plansmall, non-financial celebrations
for these many milestones.
You wanna try to keep that that,that, that, that consistency going.
You wanna keep that momentum buildingand you got to celebrate that
consistency in what you're doing here.
(07:01):
And when you find extra money.
That's a way to win.
I'm also gonna encourage you,again to share your progress with
an accountability partner, right?
I mentioned this in a show when we talkedabout who should I share my financial
goals with and help them to celebrate withyou and draw strength from their faith.
And then don't forget about praying.
(07:22):
I think it's a great time tojust sit there and pray for
renewed motivation each day.
It's tough when you've got this bigmountain of dead in front of you.
And you look at it and you'relike, man, this is Ralph.
This is just about insurmountable.
How am I gonna ever do this?
And Michael, like I said, you'renot alone feeling this way.
But there are tools and thereare people that will support you.
(07:43):
So start with a prayer.
Surround yourself with people who canhelp you and just look at it as a one
day and the next day and the next day.
But keep celebrating thatprogress, not just completion.
So Michael, I just wanna thank youso much for your question because it
really brought all the things we talkedabout to light in your question today.
Let's look at our secondlistener question, and this was
(08:04):
related to that whole topic.
I talked about balanced transfersand consolidations, and this
question comes to us from Emily.
This is what Emily wrote.
She said, You talked about balancetransfers and consolidation and
should I use a balance transfer orconsolidation for high interest debt?
It sounds tempting to lower interest,But I'm afraid I'll just end up with one
(08:27):
more debt, especially if I transfer abalance, but don't pay it off before that
0% ends.
And then she hit me with the big zingerof questions, and she said this, she
said, How do I know if it's a trulywise step and not a potential trap?
Well, Emily, that fear is absolutelyvalid, and it's something that a
(08:47):
lot of people have expressed to me,and that's why I approached that
episode with a great deal of caution.
Because as I said in the show,these tools can be very powerful.
But you need to remember,these are not magic fixes.
They're not gonna, you're not gonna sellyou a whamo and everything has gone away.
They require significant discipline.
(09:09):
And remember, we tied thisinto the Book of Proverbs.
I wanna re revisit that right nowabout discernment and wise counsel.
And that was from Proverbschapter 11, verse 14.
It says this, where there isno guidance, a people falls.
But in an abundance ofcounselors, there is safety.
Think about that for a second.
(09:30):
What is it saying there?
Where there is no guidance ofpeople falls, but in an abundance
of counselors, there is safety.
And we also talked about Proverbs,chapter 24, verse six said this, for
by wise guidance you can wage your war.
And in abundance ofcounselors there is victory.
(09:52):
See the struggle here is seeingthat the temptation of those lower
interest rates and that that's great.
You saw a lower interest rate.
Oh look, I can save a lot ofmoney, Ralph by doing that.
That is the first step, but that'snot the part you gotta focus on.
You've got to focus then on that, thediscipline required and the potential
pitfalls that you might run into.
(10:14):
And that's why I shared in thatparticular episode, my action step,
and this was the key thing here.
You gotta prayerfully consider yourspecific situation and your habits.
See, this is where you have tobe brutally honest with yourself.
If you're gonna just go and get aconsolidation loan or something like
that, and you're just gonna chargethings back up again, all you've
(10:36):
done is make the problem bigger.
So ask yourself these type of questions.
You know, Have you consistentlystuck to your budget?
Do you have a budget?
Are you sticking to it?
Are you consistently notaccumulating new debt?
If you're accumulating new debt?
This is not the answer for you.
And another thing I really want you toconsider is do you have a realistic plan?
(11:01):
And don't forget the other side ofthis and the discipline to pay off the
entire transfer or consolidated amountbefore any promotional rate expires
like you talked about in your question.
Are you going to get it paidoff before that 0% expires?
Unfortunately, I've seen it happenway too many times where people say,
oh, Ralph, I'm gonna go get thisconsolidation loan and and next thing
(11:22):
you know, it was just an excuse tojust push the, the, the meatball as
they say down the road a little bit.
if any of your answers to those questionsI just asked you are shaky or maybe.
I gotta be very honest with you,these tools are likely not the right
step for you to take right now.
So if you don't do that, what I'm goingto in instead focus on if you're worried
(11:44):
about that 0% or you don't have thediscipline, you don't have that budget,
focus on building stronger habits.
That's the one thing you can do right now.
You can build stronger habits, youcan build stronger budgeting habits,
you can build stronger trackinghabits, and you can avoid debt.
I in the first place.
But if you are disciplined and you havea solid payoff plan for the consolidated
(12:07):
amount, then you can save money.
You can save interest, and that is huge.
That is in fact wise stewardship.
But don't forget aboutthe other side of that.
There's a temptation to rack up debt onthe old card or not pay off the new loan.
That temptation is very real, andthat's why I encourage you to seek
counsel from trusted financial friends.
(12:28):
You know, Like I talked aboutin that episode, who should I
share my financial goals with?
Maybe this is a time to go meetwith one of those nonprofit
credit counseling services.
So overall, big takeaway here, Emily,is approach these tools with caution.
Understand your habits.
Understand where you are in thisprocess because listen, I don't expect
(12:50):
you to be an expert in this overnight.
This takes time.
But approach it with caution.
Approach it with prayer.
Again, go to God and say, God,here's what I'm thinking about doing.
What do you think I should do?
And then the end of this, the bigpiece of this, and I mentioned this
in the show that I did that day,you gotta have deep self-awareness.
(13:10):
Are you going to follow through?
Do you have the discipline todo what you are needing to do?
Or are you just gonna just pushthat down a far a road a little
farther, incur some more debt?
Now you've got, you've got capacityto go charge up more things.
So again, Emily, I just wannathank you for your question.
It really hit home what I wastrying to convey in that episode.
(13:31):
Well, let's move to our thirdquestion, and this one was
related to avoiding new debt.
Kind of follows along with what Emily wasasking, and this question comes to us from
James, and this is what James wrote to me.
He said, Ralph, I'm really trying toavoid new debt after listening to your,
'How can I avoid getting back into debt'show, but unexpected things happen.
My car needed a repair Ididn't save enough for.
(13:53):
How strict do I need to be aboutnot using credit cards when my
emergency fund isn't huge yet?
Now, James, the thing I love about it,first off, thank you for your question and
this is a very common, real life struggle,but what I love about your question.
It tells me that you are getting to thepoint of discipline because you say this,
you say, when my emergency fund isn'thuge, and then you, you end it with this.
(14:16):
Yet that's beautiful becauseyou're recognizing the importance
of that emergency fund.
Now, I know that's not exactly what youasked here, but when you wrote that, man,
I was like, that is a home run there.
Because like I said, James, thisis a very common real life struggle
because as I said on the show I playchurch league softball, for example.
It's, It's slow pitchy.
(14:37):
You have to arc the balland all that sort of thing.
But I love to hit, I'm not prettygood hitter if I don't say so
myself or 52-year-old, old man.
And I love to hit a curve ball becausehere's the thing, life throws curve balls
and softball pitchers throw curve balls.
If you are patient and you just waitto swing at the last minute, man,
you can, you can whack a curve balla long way, but we have to accept
(15:00):
that life throws us curve balls.
And as you alluded to James, it's toughwhen your e fund isn't fully built yet.
I love the fact that you're working onthat, but in your particular situation,
it's clear it's not built yet.
So you're trying to balance thisstruggle of no new debt versus
unexpected financial challenges.
(15:20):
And that's not easy.
But remember the wisdom thatwe talked about in that show
about avoiding new debt.
It, It does require intentionality,it requires discipline, and what
I mentioned there that that singlesolution was to develop conscious
habits and clear boundaries.
But James, you answered your own question.
Because the ultimate defense againstneeding new debt for emergencies is
(15:45):
that fully funded emergency fund.
So in your particular case, Ithink the answer is yes, you're
going to have to use credit ifyou don't have the emergency fund.
One of the things I don't wannasee you do is just completely
wipe out your emergency fund.
So if your emergency fund isn'thuge, it highlights the high,
the critical importance ofbuilding that emergency fund.
I've talked about thaton this show many times.
(16:07):
So as you, as you pay down thatdebt that you might have to
incur for this unexpected repair,also prioritize strengthening
your emergency fund like crazy.
Maybe you look for every extra dollar youcan find to throw in TA Emergency Fund to
help build that shield against new debt.
And see in a true, unavoidable emergencywhen savings fall short, then you've
(16:30):
got a different decision to make.
So James, here's the second partof my answer to your question.
I think in your case, using a lowinterest credit card, if you've got
a, and here's the other side of that.
I mean, you gotta getyour car fixed, right?
Because I guess you could walk, butif you gotta get your car fixed.
Use a low interest credit card, buthave a plan to pay it off as quickly
and as temporarily as possible.
(16:52):
Yes.
It's what I'll call a necessary evil.
It's gotta be your last resort.
Not the first, but do itwith extreme discipline.
You know, and we'll talk about that alittle bit later when we talk about,
can I use credit wisely without fallinginto debt and pay it full always.
You know, that's one of the thingswe're gonna talk about because remember,
the goal isn't just to avoid debt.
(17:14):
That's part of it, but to buildthat financial resistance to
build that emergency fund.
'cause if you have that, guess what?
It makes new debt unnecessary.
So James, I just wanna thankyou so much for your question.
It exactly illustrated the importancethe very critical importance
of having that emergency fund.
(17:35):
Because like you said,life throws curve balls.
Let's move on to our fourth question, andthis one's related to using credit wisely,
and this question comes to us from Bonnie.
I actually think this is the firsttime I've ever got a question
from somebody named Bonnie.
But Bonnie, this is what Bonnie wrote.
She said, Ralph, I'm confused.
Can a Christian actually used a creditcard without getting into trouble.
(17:56):
Should I just ditch them allto avoid debt altogether?
Like some people say.
now here's the thing, Bonnie, I knowexactly where you're going from.
There are people out there whotalk about, financial, you know,
counseling and all that stuff, andsay, don't ever use credit cards.
I'm not gonna, I'm not gonnaname who these people are because
people know who these people are.
And I think that, Bonnie, you'vegot a great question here.
(18:18):
It's a fantastic question.
It does create a lot of confusionbecause there's a lot of people
that say, oh, credit cards are evil.
Credit cards are terrible.
Ralph, you should never use credit cards.
It's not that simple.
See, the struggle you're reallytalking about Bonnie, is discernment,
you know, wise financial practice andmaybe having these absolute rules.
(18:38):
See I'm a believer thatthere are no absolutes.
Now, that probably isn't the rightthing to say in terms of, I, I
believe there is absolute right andwrong, but when it comes to this.
The thing I wanna really reinforce,and I tried to really reinforce that
in the episode, and Bonnie, I wantyou to hear this loud and clear.
Credit is simply a tool.
It's just a tool.
(18:58):
Like any tool I mentioned in the show,you could use a hammer, a carpenter uses
a hammer and builds beautiful things, butyou can also use a hammer to break stuff.
So like any tool, it can be usedfor good or it can be used for Ill.
what we're really talkingabout here is bad debt.
Bad debt is using that tool to spend moneyyou don't have and paying interest on it.
(19:19):
That's the part we wanna avoid,Bonnie, but if you can use
responsibly, if you can do what Icall responsible credit usage, that's
using that tool for your convenience.
The thing that's great about creditcards is they're a great convenience.
They can offer you purchase protection,you can get credit card rewards,
they can build a credit history.
(19:39):
I. Which can be really importantif you need to go borrow money
for a mortgage or get a car loan.
But as I mentioned in that show,and I'm gonna reiterate it right
now, spending only money youalready have and have budgeted for.
So, Bonnie, if you're askingme the question in a different
way, he didn't say this in yourquestion, but I'm gonna go there.
If you're saying to me, Ralph, listen,I don't have the money to pay for stuff.
(20:02):
I wanna go buy something, but Ican't afford to pay for it, then by
all means don't use a credit card.
But if you've got the money to pay forthat and you're like, Hey, I just wanna
use this credit card because I get points,I get this, I get that, and you're gonna
pay that full statement balance everysingle month before the interest accrues,
then I say, yes, go ahead and use it.
And like I said, approachcredit usage with a strict
(20:25):
faith fueled self-discipline.
If you can commit to paying thatfull statement balance every single
month, I mentioned in that show, topay it automatically and then only
use that card when it's budgeted.
Then yes, by all means,you can use credit wisely.
But if you're one of those people thatknows you struggle with overspending, and
let's be honest here, I've been there.
(20:48):
Maybe you're sittingthere listening right now.
You're like, right, yeah, I'mright there with you, dude.
I, I'm not very good at this.
If I've got that credit card and I'mat the mall, Shazam, it goes down.
Maybe for you it's time to ditchthose credit cards or lock 'em up.
We, We talked about in the show, put 'emin a block of ice and freezing it in a
freezer or burying them in the backyard.
I, I really believe it's good tohave a credit card as a fallback.
(21:10):
Now, again, I wanna start with thatemergency fund, but you may use a
credit card as a fallback, but askyourself that really difficult question.
Be honest with yourself.
If you're going to struggle,don't put yourself in jeopardy.
Don't put yourself in that position.
So prioritize avoiding debt first.
And if you, if you've got the money, ifyou're strict, if you follow discipline,
(21:32):
you pay that bounce off and every monthwith no interest charges, then hey,
by all means, use that credit card.
So Bonnie, I just wanna thankyou again for your question.
It's one I hear all the timebecause so many people get hung
up on some of these knuckleheads.
They hear, oh, you shouldnever have a credit card.
Okay, that's great.
But then when you go to rent acar, how do you pay for that?
Or when you need to go put adeposit on something or you
(21:53):
wanna buy something online.
So I think they got their headsburied where the sun doesn't shine.
I just think that's adumb thing to tell people.
But again, I don't disagree withthe approach if you can't manage it.
So again, Bonnie, thankyou for your question.
Well, let's move on to our fifth question.
This is related to credit scores.
This question came from David.
A lot of people get tied up incredit scores, and I remember when
(22:15):
I worked at the credit union, a lotof people didn't understand that,
but this is what David wrote me.
He said, Ralph, I checked my creditreport for the first time after listening
to your show, 'What does my creditscore actually mean for me?' And my
score was much lower than I thought.
Yeah, David, I hear you.
Dude.
There's a lot of people say that.
Honestly, he goes on to sayit feels a bit defeating.
(22:37):
And then he asked me his question.
He says, How much does this really affectmy life and is it worth worrying about?
That is a brilliant and great and bravequestion, David, because you took the
bravery to go look at that credit report.
A lot of people don't even bother.
Ah, you know, my credit's bad.
I don't even wanna look at it.
Because if they look at it, thenthey're gonna have to think about,
(22:57):
well, am I gonna do something about it?
Listen, I get it.
That initial feeling of a disappointmentor feeling like you've been defeated,
that's a real struggle and it's acommon one because it's a score.
It's like when you were in school, andI don't remember, I don't know about
you, but when I got my, my report card,I wanted to look at my report card.
I wanted all straight a's well.
If I got C's, D's, or if I got anF, I was in bigger trouble at home.
(23:19):
But let's just say I gotsome C's and low B's and C's.
Well, the credit report, the creditscore is no different than that.
It's a struggle.
It's that feeling.
But here's the thing youneed to understand, David.
I hope I made this point and I'mgonna make it again right now.
This not a fixed reality.
So yes, your credit score isimportant in today's financial system.
(23:42):
It does impact, it impacts yourability to get loans for a car, your
ability to get loans for a home.
I mentioned in the show whenI did that show the other day.
I was trying to get a car loan.
At one point.
I got pulled into the financeguy's office and it was the most
embarrassing time of my life.
He said, Ralph, yourcredit's not so great.
I don't think we're gonnabe able to help you.
So, yes, it impacts yourability to get loans.
(24:04):
It impacts the interestrate you're gonna pay.
So if your credit's not so good,you may still get the loan, but
you're gonna pay a lot more for it.
I've been there and done that as well.
I've had other situations where,again, the, these are all my decisions.
I wasn't ironing my credit.
I went into the finance guy'soffice and he says, well,
good news and bad news, Ralph.
I got your your car loan approved, butman, the interest rate is sky high.
(24:28):
So you gotta realize lendersare using that because they're
judging your character.
A credit score is a character score.
Again, we're not talking about yourChristian character, we're not talking
about your value as it relates to youas a human being, but from a creditor's
perspective, that's what they look at.
You also have to be aware some thingslike insurance premiums or getting
(24:48):
a rental apartment, all these thingscan tie into that credit score.
So yes, David, it's important, butremember what I, read to you that day
from the book of Proverbs, chapter 22,verse one, and I think we really need
to focus in on this for just a moment.
It said this, in the Bible itsays, A good name is more desirable
than great riches To be esteemedis better than silver or gold.
(25:13):
David, the truth of the matter is,and I don't know how else to, I can't
sugarcoat this and say it any differently.
Your credit score is partof your financial name.
It's part of your financial reputation.
So yes, it's absolutelyworth understanding and it's
absolutely worth managing.
Now I talked about what do you do?
Well, like I said in the show,first thing you wanna do is go
get that free credit report.
(25:34):
Again, annual credit report.com isthe only one, as I understand it, that
the government actually sanctions thatyou can get a copy of it once a year.
Start there.
That's the first part of that.
Get the credit report,read it, look at it.
What does it say?
Listen, it's a judgment of the past.
Know that when you go into it, when you'relooking at this credit score, you go,
(25:55):
oh, that credit, that's not good, dude.
This is not good at all.
But just recognize that is what wasdone prior to you pulling that report.
You're not gonna be judged therest of your days by what's on that
credit report right at that moment.
Now that being said, this gives you anopportunity to build healthier habits.
Now, if you just wannasay, you know what, Ralph?
My credit's terrible.
I'm never gonna have credit.
(26:16):
I give up.
That's not the right answer either.
So there are things that you can do.
I gave you some concrete stepsto improve it, so don't let
that initial number defeat you.
Let it be a motivator.
Let it be a motivator for change.
And David, I just wanna thank you somuch for your question, and I hear
you, it's tough when you pull thatcredit and you're like, yeah, man,
(26:36):
that score is not what I expected.
Things my grandfather used to say,and I'm gonna say this right now.
Hey, can only get better from hereif you take the time you invest.
Get those debts paid off, get thoseyour credit utilization rates down.
You can do this, David.
I have confidence in you.
Well, let's move to our sixth question,our last question for today, and
that's related to fixing your credit.
(26:57):
What a great uh, transition.
What do you think, David?
And our final question forthis show came from Jackie.
Jackie said this.
She said, Ralph, I checked my creditreport like you recommended in, 'What
does my credit score actually meanfor me?' And I found an old collection
account I didn't even know about.
My score is really low because of it.
(27:18):
How do I even start fixing thatAnd can it really help my credit
score, like you said, or willit just be a waste of my time?
Yeah, Jackie, it is frustrating becauseagain, you're going back to something
that happened before you made a mistake.
You made a a bad decision.
This is probably somethingyou weren't expecting.
But here's the thing I'm gonnasay to you, and you're gonna
(27:39):
be surprised when I say this.
Thank God you found it, because now thatyou see it, you can do something about it.
Now, I'm assuming this is somethingyou are aware of, something that you
did, you maybe had forgotten about it,so then you have an opportunity to pay
it or fix it or whatever it is, but.
Maybe it's not correct, andthat's why I talked in that show
about taking intentional steps todispute the inaccuracies and focus
(28:02):
on the key habits to improve it.
So, Jackie, first thing you wannado, as I mentioned in the show,
Dispute the accuracy of that.
'cause like I mentioned in the show,if you dispute it and the lender
doesn't get back, and if you'retalking about an old collection, to
be very candid with you, a lot oftimes either the lender doesn't exist
anymore, they just, eh, that's so old.
I'm not gonna worry about it.
(28:22):
So if you dispute it, I'm not, andlisten, I'm not, this is not Ralph
saying to you, don't pay your bills.
That's not what I'm saying.
But from a practical standpoint,if you dispute this debt and
the lender doesn't respond.
They're gonna take thatoff your credit report.
Now you may have to follow up on allthree credit bureaus, but to do that will
absolutely you, you asked the question,I wanna get to your answer, Jackie.
(28:42):
It absolutely will help Your credit score.
Your credit score is basedon all of these things.
So like I said in the show that day, thefirst thing, the most crucial first step,
if it's an error dispute that error.
Are you gonna gather your information?
It might just be, it might be,lemme go, where do I find this?
Maybe you say, oh, youknow, I thought I paid that.
(29:05):
Go do your homework 'cause maybe youdidn't pay it, but then I said go
to the credit bureau's websites andremember the three credit bureaus.
The big ones are Experian,Equifax, and TransUnion.
And again, I wanna mention it again,I'll put it in the show notes today too.
Annual credit report.com andfollow their dispute process.
Be diligent and be persistent, butfollow their instructions and listen.
(29:26):
These disputes are notgonna be resolved overnight.
If you think it's gonna be, oh, Imade a dispute today and tomorrow my
credit score is gonna be perfect again.
No, but there are time limits, sodon't, it's not gonna take years.
It's not gonna take months.
It might take a month or two.
While that dispute is happening,focused intensely on what other things
you can do to build that credit score.
Now, I'm gonna take a minute hereand just talk about those things.
(29:47):
The biggest thing you can do toimprove your credit score is to
be consistent and make all in timepayments for all of your bills.
One of the best ways that you can dothat is set up automatic payments.
Now, I'm not saying to set up anautomatic payment, just pay the minimum.
We'll talk about thatagain in another time.
Set up to make sure yourpayments are always made on time.
(30:08):
If that means setting up automaticpayments for everything, I
think that's a great idea.
The second thing, the biggest secondthing you can do is keep those
credit card balances low because Italked about this in the show and a
lot of people don't get this, thatcredit utilization ratio is enormous.
Basically they're looking for yourcredit utilization to be less than 30%.
(30:32):
You might be saying, Ralph, again, Ihave no idea what you're talking about.
Real simple example.
Let's say you've got athousand dollars credit card.
That's your credit limit.
If you've got anything more than $300owed on that credit card, that is
going to affect your credit negatively.
They don't want that toever be more than 30%.
Now, there's a couple ofeasy ways to prevent that.
(30:52):
My son, my oldest son does this.
He uses his credit card like a champ.
He pays that credit cardevery single payday.
He's never gonna pay any interest.
He's never gonna pay it late.
And guess what?
His percentage is nevergoing to be very high.
That's one of the big things you cando, is keep that utilization under 30%.
So make sure all your payments are madeon time and keep that utilization low.
(31:16):
Now, a lot of people are gonna, I'mgonna say something now, which a lot
of financial experts are gonna say,Ralph, I can't believe you don't.
Here's one of the thingsyou might wanna consider.
Call them and see if they willincrease your credit limit.
Now again, think aboutwhat I'm saying to you.
It's not an opportunity.
It's not a, it's not aget outta jail free card.
It's not a time, Hey, Mike,they doubled my credit limit.
Let me go spend, spend, spend.
(31:37):
That's not what I'm saying at all.
But one of the quickest ways toimprove your credit score if you've
got that constant utilization ratio.
I remember a client told me about this.
He said, Ralph, I put everything on mycredit, my credit card, I get paid once
a month, so at the end of the month I payoff my credit card balance in full, but it
looks like I've got really high balances.
'cause with the timing of itwhen they report, I said, okay,
(31:59):
here's what I want you to do.
Call your credit card company.
They're gonna love you because they'regonna look at your payment history.
They're gonna look at the fact thatyou pay it in full every month and ask
them to increase your credit limit.
I remember he called me back and he says,Ralph, you're never gonna believe this.
They tripled my credit limit.
I said, that's fantastic,but remember, discipline.
(32:20):
Don't go charge it up, becausenow you've got more to spend.
That's the wrong answer.
That's gonna get you in worse trouble,but you can expand your credit limit.
Like I said, best case scenario,pay your bills on time.
Keep that ratio under under 30% andlook at these things in the long term.
It's all about long-term financial health,and it's all about reducing that stress.
(32:41):
I'm gonna encourage you, Jackie, andeveryone else listening, don't give up.
You can overcome these obstacles.
We started with a question aboutpaying off that first debt and
seeing that mountain before us.
You can do this.
Well, how about we pray together?
Father God, thank you for thewisdom you provide in your word.
We just, we so focused on that today.
(33:03):
And Lord, we just, we want you to help usnavigate these complex financial topics.
And we confess Lord, that tackling debtstrategies and understanding credit
can bring us struggles, it can bringus confusion and sometimes, Lord, it
can bring us a little bit of overwhelmand fear and depression sometimes.
So, Lord, we just thank you for theclarity that you offer us through
(33:24):
our prayers and through our study.
And I just ask you right nowto bless Michael and bless
Emily and James and Bonnie.
And David and Jackie, and everyoneelse who sent in questions or
who are listening right now.
Help them apply these principles we talkedabout, Lord, and grant us all discernment
in using financial tools wisely, withdiscipline, and avoiding new debt.
(33:47):
Lord, as it says in your word, we don'twanna become a slave to the lender.
And Lord, we just ask for yourperseverance in building a
strong financial reputation.
Lord, because you said it to us, ourname, our character is important.
Help us to trust you completely, Lord,with our finances and with our future.
And we ask this in confidence.
In Jesus' name, Amen.
(34:09):
Wow, what a powerful week of gettinginto debt strategies and credit from
maintaining motivation and exploringtools for high interest debt to building
that defense against new debt and takingcontrol of your credit reputation.
These steps are all vital for gainingcontrol, and remember overall we're
trying to reduce that financial stress.
(34:30):
So I just wanna thank you again forall the questions that you sent in.
I wasn't able to use all ofthem, but those were amazing
questions and they really helped usillustrate these important topics.
And I'm just gonna encourage youright now, keep applying these
principles this week, and you canalways send in your questions.
For future recap episodes, go to ourwebsite@financiallyconfidentchristian.com.
(34:51):
And don't forget, I've got a specialgift for you on that journey today.
For the first 100 listeners who goto my website, financially confident
christian.com slash master, I'm gonnagive you a free copy of my book.
It's called Mastering Your Finances.
As I've mentioned, it's quick.
It's a powerful read, designedas a starting point to help you
break that cycle of financialshame and step into confidence.
(35:13):
Again, you'll get that by going tofinancially confident christian.com/master
and get your free copy today.
Now, tomorrow we're gonna shift ourfocus to the income side of the equation.
We've talked a lot about debt andstrategies, but tomorrow we're
gonna talk about the income side.
We're gonna be asking if your income.
It's actually the real source of yourstress or are there new opportunities
(35:35):
to explore so you don't wanna miss it.
So make sure you join me thenand let's all go out there
and be financially confident.
Christians, you can do this.
I have confidence in you.
Have confidence in yourself.
Stay financially savvy.
God bless you, and youhave a great day today.
Are you tired of feeling crushed by debt?
Does the thought of your creditscore fill you with dread?
This week we're cutting throughthe confusion and join me as we
recap six powerful strategies forattacking debt and mastering credit,
answering your toughest questionswith actionable, fuel-filled steps.
Don't miss this crucial episode ofFinancially Confident Christian.
(00:20):
Your path to financialfreedom starts right now.
Hey there.
Welcome back to your specialSunday edition of Financially
(00:42):
Confident Christian.
I'm Ralph and it's great to be withyou for another exciting recap episode.
This show helps you answer thatquestion, how can I become a
financially confident Christian?
And over the past six days, we'vecontinued our conversation into
confronting debt and navigating thatoften confusing world of credit.
(01:02):
These are often areas that bringsignificant stress to people, but also
they're huge opportunities for freedomwhen we can approach them wisely.
And today we're gonna go quickly recapeach of those six episodes, and then
for each one, I've got some greatlistener questions that have come in
that really bring these concepts to life.
So grab a warm drink, get comfortable,and let's get into our recap today.
(01:26):
This past week has been packed withstrategies for attacking debt and
gaining clarity on your credit decisions.
We started the week withthis simple question.
How do I stay motivated whenpaying off debt feels hopeless?
And in that show, we really focused onkeeping your goals visible and celebrating
milestones and really drawing strengthfrom faith and from your community.
(01:49):
I think that was a really good show,and if you missed any of them, I'm gonna
encourage you to go back and listen.
The second thing we got to secondin the week, we asked this question,
should I use a balanced transfer orconsolidation for high interest debt?
we discussed prayerfully researchingthese tools to accelerate payoff while
understanding your risk associatedwith those things by midweek, we
(02:11):
had reached this question, how canI avoid getting back into debt?
We covered developing conscious habitsand those boundaries like that wait or
what I call the pause rule and reallyworking to strengthen your emergency fund.
Then we got to Thursday's episode andwe asked this very pointed question,
and that was, can I use creditwisely without falling into debt?
(02:33):
That was a question that was reallyon the mind of a lot of people and
I really emphasized that strictself-discipline and committing to pay
that full statement balance each month.
In fact, that was thecommitment that we made.
Are you sticking with your commitment?
I sure hope you are by Friday.
We got to.
What does my credit scoreactually mean for me?
A lot of people get all hungup on those credit scores.
(02:55):
So we demystified the creditreports we talked about credit
scores and we discussed accessingyour free report for awareness.
Again, that was annual credit report.com.
And then on Saturday we got to thisbig takeaway question, how can I fix
mistakes and improve my credit score?
We talked about disputing errors andfocusing on those key habits like.
(03:16):
On time payments andlow credit utilization.
It has really been a weekof strategic debt attack and
empowering credit knowledge.
And these topics, they bring outsignificant questions and they,
they talk about real strategies.
And I've got some excellent questionsfrom listeners just like you who
asked questions after the show.
So let's get to our first questionrelated to how do I stay motivated
(03:40):
when debt feels hopeless.
This question came to us fromMichael, and Michael wrote this.
He said, Ralph, I've been usingthe debt snowball and finding
extra money like you said.
I paid off my first small debt and thatfelt great for a minute, but looking
at the next one, it's much bigger andI'm already feeling discouraged again.
How do I keep celebrating thosewins and stay motivated when the
(04:04):
next mountain looks so much higher?
Wow.
Michael, you're absolutelyright, and thank you for your
honesty in asking that question.
Because that feeling that you'rehaving right now is incredibly common.
I remember going through this myself whenI was going through that debt spiral,
that debt cycle, and I got the first onepaid off and I felt, you know, fantastic.
I got this debt paid off and then Ilooked on my sheet and I was like, oh,
(04:26):
here, this next one, this is a doozy.
So Michael, this feels incredibly common.
A lot of people are dealing with that,and you have to think about it in this
term, like I said, during that show,and I'm gonna repeat it right now.
This is not a sprint, it's amarathon paying off your debts.
You didn't make 'em overnight.
So it is a marathon to get them paid off.
(04:47):
And I just want you toremember this truth.
And this one came to us from thebook of Hebrews chapter 12, verses
one and two, and it says this.
Therefore, since we are surrounded bysuch a great cloud of witnesses, let
us throw off everything that hindersand the sin that so easily, entangles.
Let us run with perseverance.
The race marked out for us, fixingour eyes on Jesus, the pioneer and
(05:11):
the perfecter of faith for the joyset before him, he endured the cross
scorning it's shame and sat down atthe right hand of the throne of God.
And I just thought that was such apowerful verse to talk about today because
what it's really key in on Michael andeveryone else listening is it's your why.
It's that why for debt freedom.
(05:34):
Because if you don't understand yourwhy, it is really hard to keep moving.
And that's why I talked about that.
You know, How do I stay motivatedwhen paying off debt feels hopeless?
That was the whole point.
And we talked about the exercisethat I'm gonna mention here
in a second during that show.
And that is to really visualizethat fully debt-free future.
(05:54):
What does that look like for you?
Not worrying about that debthanging over your head and that
big mountain in front of you.
I really focused on, developing thewhy for you because you gotta keep
that why visible in front of you sothat you know what you're working for.
The second thing we talked about,it's breaking down that journey into
smaller milestones beyond just thatfirst debt because Michael, it's
(06:16):
great you got past that first one.
That's the whole point of usingthat method, and maybe you hit that
total amount paid goal that you werelooking for with that first one.
But maybe it's time to sort of refocus.
Maybe you wanna set a certain dollaramount goal, maybe, I don't know
how much debt you have, but let'sjust say you have $10,000 in debt.
Well, maybe you set a goal for, I'm gonnapay the first 2,500 off, or maybe half
(06:40):
or whatever that next specific debt is.
I'm gonna really encourage you to plansmall, non-financial celebrations
for these many milestones.
You wanna try to keep that that,that, that, that consistency going.
You wanna keep that momentum buildingand you got to celebrate that
consistency in what you're doing here.
(07:01):
And when you find extra money.
That's a way to win.
I'm also gonna encourage you,again to share your progress with
an accountability partner, right?
I mentioned this in a show when we talkedabout who should I share my financial
goals with and help them to celebrate withyou and draw strength from their faith.
And then don't forget about praying.
(07:22):
I think it's a great time tojust sit there and pray for
renewed motivation each day.
It's tough when you've got this bigmountain of dead in front of you.
And you look at it and you'relike, man, this is Ralph.
This is just about insurmountable.
How am I gonna ever do this?
And Michael, like I said, you'renot alone feeling this way.
But there are tools and thereare people that will support you.
(07:43):
So start with a prayer.
Surround yourself with people who canhelp you and just look at it as a one
day and the next day and the next day.
But keep celebrating thatprogress, not just completion.
So Michael, I just wanna thank youso much for your question because it
really brought all the things we talkedabout to light in your question today.
Let's look at our secondlistener question, and this was
(08:04):
related to that whole topic.
I talked about balanced transfersand consolidations, and this
question comes to us from Emily.
This is what Emily wrote.
She said, You talked about balancetransfers and consolidation and
should I use a balance transfer orconsolidation for high interest debt?
It sounds tempting to lower interest,But I'm afraid I'll just end up with one
(08:27):
more debt, especially if I transfer abalance, but don't pay it off before that
0% ends.
And then she hit me with the big zingerof questions, and she said this, she
said, How do I know if it's a trulywise step and not a potential trap?
Well, Emily, that fear is absolutelyvalid, and it's something that a
(08:47):
lot of people have expressed to me,and that's why I approached that
episode with a great deal of caution.
Because as I said in the show,these tools can be very powerful.
But you need to remember,these are not magic fixes.
They're not gonna, you're not gonna sellyou a whamo and everything has gone away.
They require significant discipline.
(09:09):
And remember, we tied thisinto the Book of Proverbs.
I wanna re revisit that right nowabout discernment and wise counsel.
And that was from Proverbschapter 11, verse 14.
It says this, where there isno guidance, a people falls.
But in an abundance ofcounselors, there is safety.
Think about that for a second.
(09:30):
What is it saying there?
Where there is no guidance ofpeople falls, but in an abundance
of counselors, there is safety.
And we also talked about Proverbs,chapter 24, verse six said this, for
by wise guidance you can wage your war.
And in abundance ofcounselors there is victory.
(09:52):
See the struggle here is seeingthat the temptation of those lower
interest rates and that that's great.
You saw a lower interest rate.
Oh look, I can save a lot ofmoney, Ralph by doing that.
That is the first step, but that'snot the part you gotta focus on.
You've got to focus then on that, thediscipline required and the potential
pitfalls that you might run into.
(10:14):
And that's why I shared in thatparticular episode, my action step,
and this was the key thing here.
You gotta prayerfully consider yourspecific situation and your habits.
See, this is where you have tobe brutally honest with yourself.
If you're gonna just go and get aconsolidation loan or something like
that, and you're just gonna chargethings back up again, all you've
(10:36):
done is make the problem bigger.
So ask yourself these type of questions.
You know, Have you consistentlystuck to your budget?
Do you have a budget?
Are you sticking to it?
Are you consistently notaccumulating new debt?
If you're accumulating new debt?
This is not the answer for you.
And another thing I really want you toconsider is do you have a realistic plan?
(11:01):
And don't forget the other side ofthis and the discipline to pay off the
entire transfer or consolidated amountbefore any promotional rate expires
like you talked about in your question.
Are you going to get it paidoff before that 0% expires?
Unfortunately, I've seen it happenway too many times where people say,
oh, Ralph, I'm gonna go get thisconsolidation loan and and next thing
(11:22):
you know, it was just an excuse tojust push the, the, the meatball as
they say down the road a little bit.
if any of your answers to those questionsI just asked you are shaky or maybe.
I gotta be very honest with you,these tools are likely not the right
step for you to take right now.
So if you don't do that, what I'm goingto in instead focus on if you're worried
(11:44):
about that 0% or you don't have thediscipline, you don't have that budget,
focus on building stronger habits.
That's the one thing you can do right now.
You can build stronger habits, youcan build stronger budgeting habits,
you can build stronger trackinghabits, and you can avoid debt.
I in the first place.
But if you are disciplined and you havea solid payoff plan for the consolidated
(12:07):
amount, then you can save money.
You can save interest, and that is huge.
That is in fact wise stewardship.
But don't forget aboutthe other side of that.
There's a temptation to rack up debt onthe old card or not pay off the new loan.
That temptation is very real, andthat's why I encourage you to seek
counsel from trusted financial friends.
(12:28):
You know, Like I talked aboutin that episode, who should I
share my financial goals with?
Maybe this is a time to go meetwith one of those nonprofit
credit counseling services.
So overall, big takeaway here, Emily,is approach these tools with caution.
Understand your habits.
Understand where you are in thisprocess because listen, I don't expect
(12:50):
you to be an expert in this overnight.
This takes time.
But approach it with caution.
Approach it with prayer.
Again, go to God and say, God,here's what I'm thinking about doing.
What do you think I should do?
And then the end of this, the bigpiece of this, and I mentioned this
in the show that I did that day,you gotta have deep self-awareness.
(13:10):
Are you going to follow through?
Do you have the discipline todo what you are needing to do?
Or are you just gonna just pushthat down a far a road a little
farther, incur some more debt?
Now you've got, you've got capacityto go charge up more things.
So again, Emily, I just wannathank you for your question.
It really hit home what I wastrying to convey in that episode.
(13:31):
Well, let's move to our thirdquestion, and this one was
related to avoiding new debt.
Kind of follows along with what Emily wasasking, and this question comes to us from
James, and this is what James wrote to me.
He said, Ralph, I'm really trying toavoid new debt after listening to your,
'How can I avoid getting back into debt'show, but unexpected things happen.
My car needed a repair Ididn't save enough for.
(13:53):
How strict do I need to be aboutnot using credit cards when my
emergency fund isn't huge yet?
Now, James, the thing I love about it,first off, thank you for your question and
this is a very common, real life struggle,but what I love about your question.
It tells me that you are getting to thepoint of discipline because you say this,
you say, when my emergency fund isn'thuge, and then you, you end it with this.
(14:16):
Yet that's beautiful becauseyou're recognizing the importance
of that emergency fund.
Now, I know that's not exactly what youasked here, but when you wrote that, man,
I was like, that is a home run there.
Because like I said, James, thisis a very common real life struggle
because as I said on the show I playchurch league softball, for example.
It's, It's slow pitchy.
(14:37):
You have to arc the balland all that sort of thing.
But I love to hit, I'm not prettygood hitter if I don't say so
myself or 52-year-old, old man.
And I love to hit a curve ball becausehere's the thing, life throws curve balls
and softball pitchers throw curve balls.
If you are patient and you just waitto swing at the last minute, man,
you can, you can whack a curve balla long way, but we have to accept
(15:00):
that life throws us curve balls.
And as you alluded to James, it's toughwhen your e fund isn't fully built yet.
I love the fact that you're working onthat, but in your particular situation,
it's clear it's not built yet.
So you're trying to balance thisstruggle of no new debt versus
unexpected financial challenges.
(15:20):
And that's not easy.
But remember the wisdom thatwe talked about in that show
about avoiding new debt.
It, It does require intentionality,it requires discipline, and what
I mentioned there that that singlesolution was to develop conscious
habits and clear boundaries.
But James, you answered your own question.
Because the ultimate defense againstneeding new debt for emergencies is
(15:45):
that fully funded emergency fund.
So in your particular case, Ithink the answer is yes, you're
going to have to use credit ifyou don't have the emergency fund.
One of the things I don't wannasee you do is just completely
wipe out your emergency fund.
So if your emergency fund isn'thuge, it highlights the high,
the critical importance ofbuilding that emergency fund.
I've talked about thaton this show many times.
(16:07):
So as you, as you pay down thatdebt that you might have to
incur for this unexpected repair,also prioritize strengthening
your emergency fund like crazy.
Maybe you look for every extra dollar youcan find to throw in TA Emergency Fund to
help build that shield against new debt.
And see in a true, unavoidable emergencywhen savings fall short, then you've
(16:30):
got a different decision to make.
So James, here's the second partof my answer to your question.
I think in your case, using a lowinterest credit card, if you've got
a, and here's the other side of that.
I mean, you gotta getyour car fixed, right?
Because I guess you could walk, butif you gotta get your car fixed.
Use a low interest credit card, buthave a plan to pay it off as quickly
and as temporarily as possible.
(16:52):
Yes.
It's what I'll call a necessary evil.
It's gotta be your last resort.
Not the first, but do itwith extreme discipline.
You know, and we'll talk about that alittle bit later when we talk about,
can I use credit wisely without fallinginto debt and pay it full always.
You know, that's one of the thingswe're gonna talk about because remember,
the goal isn't just to avoid debt.
(17:14):
That's part of it, but to buildthat financial resistance to
build that emergency fund.
'cause if you have that, guess what?
It makes new debt unnecessary.
So James, I just wanna thankyou so much for your question.
It exactly illustrated the importancethe very critical importance
of having that emergency fund.
(17:35):
Because like you said,life throws curve balls.
Let's move on to our fourth question, andthis one's related to using credit wisely,
and this question comes to us from Bonnie.
I actually think this is the firsttime I've ever got a question
from somebody named Bonnie.
But Bonnie, this is what Bonnie wrote.
She said, Ralph, I'm confused.
Can a Christian actually used a creditcard without getting into trouble.
(17:56):
Should I just ditch them allto avoid debt altogether?
Like some people say.
now here's the thing, Bonnie, I knowexactly where you're going from.
There are people out there whotalk about, financial, you know,
counseling and all that stuff, andsay, don't ever use credit cards.
I'm not gonna, I'm not gonnaname who these people are because
people know who these people are.
And I think that, Bonnie, you'vegot a great question here.
(18:18):
It's a fantastic question.
It does create a lot of confusionbecause there's a lot of people
that say, oh, credit cards are evil.
Credit cards are terrible.
Ralph, you should never use credit cards.
It's not that simple.
See, the struggle you're reallytalking about Bonnie, is discernment,
you know, wise financial practice andmaybe having these absolute rules.
(18:38):
See I'm a believer thatthere are no absolutes.
Now, that probably isn't the rightthing to say in terms of, I, I
believe there is absolute right andwrong, but when it comes to this.
The thing I wanna really reinforce,and I tried to really reinforce that
in the episode, and Bonnie, I wantyou to hear this loud and clear.
Credit is simply a tool.
It's just a tool.
(18:58):
Like any tool I mentioned in the show,you could use a hammer, a carpenter uses
a hammer and builds beautiful things, butyou can also use a hammer to break stuff.
So like any tool, it can be usedfor good or it can be used for Ill.
what we're really talkingabout here is bad debt.
Bad debt is using that tool to spend moneyyou don't have and paying interest on it.
(19:19):
That's the part we wanna avoid,Bonnie, but if you can use
responsibly, if you can do what Icall responsible credit usage, that's
using that tool for your convenience.
The thing that's great about creditcards is they're a great convenience.
They can offer you purchase protection,you can get credit card rewards,
they can build a credit history.
(19:39):
I. Which can be really importantif you need to go borrow money
for a mortgage or get a car loan.
But as I mentioned in that show,and I'm gonna reiterate it right
now, spending only money youalready have and have budgeted for.
So, Bonnie, if you're askingme the question in a different
way, he didn't say this in yourquestion, but I'm gonna go there.
If you're saying to me, Ralph, listen,I don't have the money to pay for stuff.
(20:02):
I wanna go buy something, but Ican't afford to pay for it, then by
all means don't use a credit card.
But if you've got the money to pay forthat and you're like, Hey, I just wanna
use this credit card because I get points,I get this, I get that, and you're gonna
pay that full statement balance everysingle month before the interest accrues,
then I say, yes, go ahead and use it.
And like I said, approachcredit usage with a strict
(20:25):
faith fueled self-discipline.
If you can commit to paying thatfull statement balance every single
month, I mentioned in that show, topay it automatically and then only
use that card when it's budgeted.
Then yes, by all means,you can use credit wisely.
But if you're one of those people thatknows you struggle with overspending, and
let's be honest here, I've been there.
(20:48):
Maybe you're sittingthere listening right now.
You're like, right, yeah, I'mright there with you, dude.
I, I'm not very good at this.
If I've got that credit card and I'mat the mall, Shazam, it goes down.
Maybe for you it's time to ditchthose credit cards or lock 'em up.
We, We talked about in the show, put 'emin a block of ice and freezing it in a
freezer or burying them in the backyard.
I, I really believe it's good tohave a credit card as a fallback.
(21:10):
Now, again, I wanna start with thatemergency fund, but you may use a
credit card as a fallback, but askyourself that really difficult question.
Be honest with yourself.
If you're going to struggle,don't put yourself in jeopardy.
Don't put yourself in that position.
So prioritize avoiding debt first.
And if you, if you've got the money, ifyou're strict, if you follow discipline,
(21:32):
you pay that bounce off and every monthwith no interest charges, then hey,
by all means, use that credit card.
So Bonnie, I just wanna thankyou again for your question.
It's one I hear all the timebecause so many people get hung
up on some of these knuckleheads.
They hear, oh, you shouldnever have a credit card.
Okay, that's great.
But then when you go to rent acar, how do you pay for that?
Or when you need to go put adeposit on something or you
(21:53):
wanna buy something online.
So I think they got their headsburied where the sun doesn't shine.
I just think that's adumb thing to tell people.
But again, I don't disagree withthe approach if you can't manage it.
So again, Bonnie, thankyou for your question.
Well, let's move on to our fifth question.
This is related to credit scores.
This question came from David.
A lot of people get tied up incredit scores, and I remember when
(22:15):
I worked at the credit union, a lotof people didn't understand that,
but this is what David wrote me.
He said, Ralph, I checked my creditreport for the first time after listening
to your show, 'What does my creditscore actually mean for me?' And my
score was much lower than I thought.
Yeah, David, I hear you.
Dude.
There's a lot of people say that.
Honestly, he goes on to sayit feels a bit defeating.
(22:37):
And then he asked me his question.
He says, How much does this really affectmy life and is it worth worrying about?
That is a brilliant and great and bravequestion, David, because you took the
bravery to go look at that credit report.
A lot of people don't even bother.
Ah, you know, my credit's bad.
I don't even wanna look at it.
Because if they look at it, thenthey're gonna have to think about,
(22:57):
well, am I gonna do something about it?
Listen, I get it.
That initial feeling of a disappointmentor feeling like you've been defeated,
that's a real struggle and it's acommon one because it's a score.
It's like when you were in school, andI don't remember, I don't know about
you, but when I got my, my report card,I wanted to look at my report card.
I wanted all straight a's well.
If I got C's, D's, or if I got anF, I was in bigger trouble at home.
(23:19):
But let's just say I gotsome C's and low B's and C's.
Well, the credit report, the creditscore is no different than that.
It's a struggle.
It's that feeling.
But here's the thing youneed to understand, David.
I hope I made this point and I'mgonna make it again right now.
This not a fixed reality.
So yes, your credit score isimportant in today's financial system.
(23:42):
It does impact, it impacts yourability to get loans for a car, your
ability to get loans for a home.
I mentioned in the show whenI did that show the other day.
I was trying to get a car loan.
At one point.
I got pulled into the financeguy's office and it was the most
embarrassing time of my life.
He said, Ralph, yourcredit's not so great.
I don't think we're gonnabe able to help you.
So, yes, it impacts yourability to get loans.
(24:04):
It impacts the interestrate you're gonna pay.
So if your credit's not so good,you may still get the loan, but
you're gonna pay a lot more for it.
I've been there and done that as well.
I've had other situations where,again, the, these are all my decisions.
I wasn't ironing my credit.
I went into the finance guy'soffice and he says, well,
good news and bad news, Ralph.
I got your your car loan approved, butman, the interest rate is sky high.
(24:28):
So you gotta realize lendersare using that because they're
judging your character.
A credit score is a character score.
Again, we're not talking about yourChristian character, we're not talking
about your value as it relates to youas a human being, but from a creditor's
perspective, that's what they look at.
You also have to be aware some thingslike insurance premiums or getting
(24:48):
a rental apartment, all these thingscan tie into that credit score.
So yes, David, it's important, butremember what I, read to you that day
from the book of Proverbs, chapter 22,verse one, and I think we really need
to focus in on this for just a moment.
It said this, in the Bible itsays, A good name is more desirable
than great riches To be esteemedis better than silver or gold.
(25:13):
David, the truth of the matter is,and I don't know how else to, I can't
sugarcoat this and say it any differently.
Your credit score is partof your financial name.
It's part of your financial reputation.
So yes, it's absolutelyworth understanding and it's
absolutely worth managing.
Now I talked about what do you do?
Well, like I said in the show,first thing you wanna do is go
get that free credit report.
(25:34):
Again, annual credit report.com isthe only one, as I understand it, that
the government actually sanctions thatyou can get a copy of it once a year.
Start there.
That's the first part of that.
Get the credit report,read it, look at it.
What does it say?
Listen, it's a judgment of the past.
Know that when you go into it, when you'relooking at this credit score, you go,
(25:55):
oh, that credit, that's not good, dude.
This is not good at all.
But just recognize that is what wasdone prior to you pulling that report.
You're not gonna be judged therest of your days by what's on that
credit report right at that moment.
Now that being said, this gives you anopportunity to build healthier habits.
Now, if you just wannasay, you know what, Ralph?
My credit's terrible.
I'm never gonna have credit.
(26:16):
I give up.
That's not the right answer either.
So there are things that you can do.
I gave you some concrete stepsto improve it, so don't let
that initial number defeat you.
Let it be a motivator.
Let it be a motivator for change.
And David, I just wanna thank you somuch for your question, and I hear
you, it's tough when you pull thatcredit and you're like, yeah, man,
(26:36):
that score is not what I expected.
Things my grandfather used to say,and I'm gonna say this right now.
Hey, can only get better from hereif you take the time you invest.
Get those debts paid off, get thoseyour credit utilization rates down.
You can do this, David.
I have confidence in you.
Well, let's move to our sixth question,our last question for today, and
that's related to fixing your credit.
(26:57):
What a great uh, transition.
What do you think, David?
And our final question forthis show came from Jackie.
Jackie said this.
She said, Ralph, I checked my creditreport like you recommended in, 'What
does my credit score actually meanfor me?' And I found an old collection
account I didn't even know about.
My score is really low because of it.
(27:18):
How do I even start fixing thatAnd can it really help my credit
score, like you said, or willit just be a waste of my time?
Yeah, Jackie, it is frustrating becauseagain, you're going back to something
that happened before you made a mistake.
You made a a bad decision.
This is probably somethingyou weren't expecting.
But here's the thing I'm gonnasay to you, and you're gonna
(27:39):
be surprised when I say this.
Thank God you found it, because now thatyou see it, you can do something about it.
Now, I'm assuming this is somethingyou are aware of, something that you
did, you maybe had forgotten about it,so then you have an opportunity to pay
it or fix it or whatever it is, but.
Maybe it's not correct, andthat's why I talked in that show
about taking intentional steps todispute the inaccuracies and focus
(28:02):
on the key habits to improve it.
So, Jackie, first thing you wannado, as I mentioned in the show,
Dispute the accuracy of that.
'cause like I mentioned in the show,if you dispute it and the lender
doesn't get back, and if you'retalking about an old collection, to
be very candid with you, a lot oftimes either the lender doesn't exist
anymore, they just, eh, that's so old.
I'm not gonna worry about it.
(28:22):
So if you dispute it, I'm not, andlisten, I'm not, this is not Ralph
saying to you, don't pay your bills.
That's not what I'm saying.
But from a practical standpoint,if you dispute this debt and
the lender doesn't respond.
They're gonna take thatoff your credit report.
Now you may have to follow up on allthree credit bureaus, but to do that will
absolutely you, you asked the question,I wanna get to your answer, Jackie.
(28:42):
It absolutely will help Your credit score.
Your credit score is basedon all of these things.
So like I said in the show that day, thefirst thing, the most crucial first step,
if it's an error dispute that error.
Are you gonna gather your information?
It might just be, it might be,lemme go, where do I find this?
Maybe you say, oh, youknow, I thought I paid that.
(29:05):
Go do your homework 'cause maybe youdidn't pay it, but then I said go
to the credit bureau's websites andremember the three credit bureaus.
The big ones are Experian,Equifax, and TransUnion.
And again, I wanna mention it again,I'll put it in the show notes today too.
Annual credit report.com andfollow their dispute process.
Be diligent and be persistent, butfollow their instructions and listen.
(29:26):
These disputes are notgonna be resolved overnight.
If you think it's gonna be, oh, Imade a dispute today and tomorrow my
credit score is gonna be perfect again.
No, but there are time limits, sodon't, it's not gonna take years.
It's not gonna take months.
It might take a month or two.
While that dispute is happening,focused intensely on what other things
you can do to build that credit score.
Now, I'm gonna take a minute hereand just talk about those things.
(29:47):
The biggest thing you can do toimprove your credit score is to
be consistent and make all in timepayments for all of your bills.
One of the best ways that you can dothat is set up automatic payments.
Now, I'm not saying to set up anautomatic payment, just pay the minimum.
We'll talk about thatagain in another time.
Set up to make sure yourpayments are always made on time.
(30:08):
If that means setting up automaticpayments for everything, I
think that's a great idea.
The second thing, the biggest secondthing you can do is keep those
credit card balances low because Italked about this in the show and a
lot of people don't get this, thatcredit utilization ratio is enormous.
Basically they're looking for yourcredit utilization to be less than 30%.
(30:32):
You might be saying, Ralph, again, Ihave no idea what you're talking about.
Real simple example.
Let's say you've got athousand dollars credit card.
That's your credit limit.
If you've got anything more than $300owed on that credit card, that is
going to affect your credit negatively.
They don't want that toever be more than 30%.
Now, there's a couple ofeasy ways to prevent that.
(30:52):
My son, my oldest son does this.
He uses his credit card like a champ.
He pays that credit cardevery single payday.
He's never gonna pay any interest.
He's never gonna pay it late.
And guess what?
His percentage is nevergoing to be very high.
That's one of the big things you cando, is keep that utilization under 30%.
So make sure all your payments are madeon time and keep that utilization low.
(31:16):
Now, a lot of people are gonna, I'mgonna say something now, which a lot
of financial experts are gonna say,Ralph, I can't believe you don't.
Here's one of the thingsyou might wanna consider.
Call them and see if they willincrease your credit limit.
Now again, think aboutwhat I'm saying to you.
It's not an opportunity.
It's not a, it's not aget outta jail free card.
It's not a time, Hey, Mike,they doubled my credit limit.
Let me go spend, spend, spend.
(31:37):
That's not what I'm saying at all.
But one of the quickest ways toimprove your credit score if you've
got that constant utilization ratio.
I remember a client told me about this.
He said, Ralph, I put everything on mycredit, my credit card, I get paid once
a month, so at the end of the month I payoff my credit card balance in full, but it
looks like I've got really high balances.
'cause with the timing of itwhen they report, I said, okay,
(31:59):
here's what I want you to do.
Call your credit card company.
They're gonna love you because they'regonna look at your payment history.
They're gonna look at the fact thatyou pay it in full every month and ask
them to increase your credit limit.
I remember he called me back and he says,Ralph, you're never gonna believe this.
They tripled my credit limit.
I said, that's fantastic,but remember, discipline.
(32:20):
Don't go charge it up, becausenow you've got more to spend.
That's the wrong answer.
That's gonna get you in worse trouble,but you can expand your credit limit.
Like I said, best case scenario,pay your bills on time.
Keep that ratio under under 30% andlook at these things in the long term.
It's all about long-term financial health,and it's all about reducing that stress.
(32:41):
I'm gonna encourage you, Jackie, andeveryone else listening, don't give up.
You can overcome these obstacles.
We started with a question aboutpaying off that first debt and
seeing that mountain before us.
You can do this.
Well, how about we pray together?
Father God, thank you for thewisdom you provide in your word.
We just, we so focused on that today.
(33:03):
And Lord, we just, we want you to help usnavigate these complex financial topics.
And we confess Lord, that tackling debtstrategies and understanding credit
can bring us struggles, it can bringus confusion and sometimes, Lord, it
can bring us a little bit of overwhelmand fear and depression sometimes.
So, Lord, we just thank you for theclarity that you offer us through
(33:24):
our prayers and through our study.
And I just ask you right nowto bless Michael and bless
Emily and James and Bonnie.
And David and Jackie, and everyoneelse who sent in questions or
who are listening right now.
Help them apply these principles we talkedabout, Lord, and grant us all discernment
in using financial tools wisely, withdiscipline, and avoiding new debt.
(33:47):
Lord, as it says in your word, we don'twanna become a slave to the lender.
And Lord, we just ask for yourperseverance in building a
strong financial reputation.
Lord, because you said it to us, ourname, our character is important.
Help us to trust you completely, Lord,with our finances and with our future.
And we ask this in confidence.
In Jesus' name, Amen.
(34:09):
Wow, what a powerful week of gettinginto debt strategies and credit from
maintaining motivation and exploringtools for high interest debt to building
that defense against new debt and takingcontrol of your credit reputation.
These steps are all vital for gainingcontrol, and remember overall we're
trying to reduce that financial stress.
(34:30):
So I just wanna thank you again forall the questions that you sent in.
I wasn't able to use all ofthem, but those were amazing
questions and they really helped usillustrate these important topics.
And I'm just gonna encourage youright now, keep applying these
principles this week, and you canalways send in your questions.
For future recap episodes, go to ourwebsite@financiallyconfidentchristian.com.
(34:51):
And don't forget, I've got a specialgift for you on that journey today.
For the first 100 listeners who goto my website, financially confident
christian.com slash master, I'm gonnagive you a free copy of my book.
It's called Mastering Your Finances.
As I've mentioned, it's quick.
It's a powerful read, designedas a starting point to help you
break that cycle of financialshame and step into confidence.
(35:13):
Again, you'll get that by going tofinancially confident christian.com/master
and get your free copy today.
Now, tomorrow we're gonna shift ourfocus to the income side of the equation.
We've talked a lot about debt andstrategies, but tomorrow we're
gonna talk about the income side.
We're gonna be asking if your income.
It's actually the real source of yourstress or are there new opportunities
(35:35):
to explore so you don't wanna miss it.
So make sure you join me thenand let's all go out there
and be financially confident.
Christians, you can do this.
I have confidence in you.
Have confidence in yourself.
Stay financially savvy.
God bless you, and youhave a great day today.
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